On One Income
There are lots of reasons
why families have to live on one income. Here are some
tips to help you do it comfortably.
lots of reasons why families have to live on one income,
a new baby, single parent, husband loses his job or
simply because one of you wants to spend more time with
your children. Whatever your situation is, living on one
income can mean itís time to cut back, or it can mean
that now is the opportunity to slice your spending in
half by making a few clever budget changes.
To start at the very basics it is absolutely essential
to look at your cash flow, what money is coming in and
what money is going out. The first part should be easy,
simply list every penny of income you receive on a
regular basis every month. This might be before you give
up a second income to see if you can afford it, or this
may be your single income that you are living on now.
Then comes the slightly harder part of listing
everything that you are committed to spending on every
month, this includes your mortgage, car payments, loans,
utility bills like electricity, cable and water. Make a
full list of everything that you absolutely must pay for
You should add a realistic amount for food and other
essentials such as diapers for your little ones or any
other costs that you have to pay on a regular basis.
These are your essential monthly costs.
Then simply take away your monthly costs from your
monthly income. The difference between these two amounts
is you disposable cash or how much you have to spend on
everything else. Of course this amount might actually be
negative and this is actually more often the situation
for many families where you suddenly realize you canít
afford your living.
But donít worry because there are lots of things you can
do to reduce the costs. The first place to start is on
the list of items that you made for you essential
We all usually have a long list of essential monthly
costs so if you can reduce each one by ten dollars here
and twenty dollars there and it will eventually all add
up to make a significant difference.
If you are living on one income, go through your list of
monthly bills and see how you can reduce each one. Quite
often you can call credit card companies and get a
reduced rate. You may be able to switch cell phone
providers or find a lower rate.
Many people that are living on one income forget to take
advantage of offers that come through the door for
cheaper monthly cable or a lower monthly telephone
service. Also, one of the easiest fixed costs that you
can lower is insurance. Call all the car or home
insurance companies and get them to beat each others
offers. As long as you are realistically lowering your
monthly costs then you are going in the right direction.
Then take a look at your existing credit. If you have
good credit then you are in a good position to shop
around for a better rate car loan or a better mortgage.
If youíre credit isnít great then log onto the three
credit companies, Equifax, Experian, and TransUnion.
These will give you practical information on how to fix
your credit so that you can get those monthly costs down
by either consolidating your debts or replacing them
with loans over a longer lending period or with a better
interest. Again, be careful you donít end up paying
Then have a look at all the things that can buy cheaper,
like cheaper gas, cheaper brands of food. There are lots
of ways to spend less on the things you buy on a regular
basis by either finding sales, coupons or special offers
or buying it somewhere else where itís cheaper.
Then comes the part where you have to look at all the
things you can cut out of your budget all together. Do
you have any monthly subscriptions or memberships that
you donít really use anymore? Do you spend money on
services or products that you donít really use any more?
Do you really need those expensive brands?
Once you have sorted all your costs you should see if
your monthly costs both essential and non-essential are
lower than your monthly income. If it is then great and
pat yourself on the back for a job well done.
If it isnít, and you have really tried to squeeze every
last dollar out of the costs then you may have to
reconsider your situation. You could either start
cutting things out of the budget like using only one
car, one cell phone, or go back to the income and find
ways to increase whatís coming in by finding a better
paid job or working from home in the evenings.
Either way, try and be creative in thinking about the
ways you could save money so that living on one income
is a comfortable step and not a financial nightmare.
With a little thought and planning ahead you may be able
to get by easier than you think.
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Budget & Save More Money Than You Ever Thought Possible - Without Giving Up All
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