Living on a single income is out of the way for many, but it is the reality for many families. These families choose to or are forced to live on one income for several reasons, such as the benefit of having a stay-at-home parent, job loss because of COVID-19 pandemic, health issues, or to continue their education. Whatever the reason, making ends meet on one income is not easy.
If that’s the case for you, transitioning from two household incomes to one will affect your lifestyle. However, making some conscious decisions on how you manage the change will certainly help you. Here are the top 5 money tips for one-income families you need to follow to maintain your financial stability.
Set a Budget and Stick to It
You can live on almost any income if you set a budget and stick to it. So, when you become a one-income family, it is essential to adjust the budget and make a workable family budget. This will help you understand where your money is going and enable you to adjust your spending. See where you can cut back, write the specific categories of spending, and stick to it.
Limit Your Spending
Be honest with yourself about what you can afford and what not. Try not to go too often on a shopping spree and rack up bills on your credit card only to regret later. What if you lose the one source of income that you have, how will you pay off your debt? Whenever you are out shopping, just ask yourself if you really need it. It will surprise you how often you realize that you don’t really need it. Also, try to pay for everything with cash instead of credit cards.
After following the budget and cutting your expenses, you will have some money left over. However, if you do not have leftover money yet, don’t despair, eventually, you will have it soon. Now, if you have some extra money, don’t get tempted to spend it, save it instead. You need to get into the habit of saving before you make a budget. This will help you set aside money to increase your emergency savings, save for mortgage down payment and reach your financial goals. It is always better to save first before spending. This is a great tip everyone should keep in mind, not only the one-income families.
Saving is a good habit, as it helps you earn a little bit of interest. However, to tell you the truth, simply saving is not enough. If you want your money to grow, try investing it by buying and holding of stocks, mutual funds, bonds, or other investment instruments for an extended period of time. If you feel comfortable trading, you can also buy and sell stocks, commodities, or other instruments.
Explore Additional Income
Living on a single income does not mean that the partner who stays at home cannot earn. There are a lot of things you can choose to do like selling your old stuff, earning extra money leveraging your hobby, making video tutorials, or writing blogs. Also, there are so many work from home opportunities, research about them and see what better fits your skills.
You may be under a lot of pressure but following these money tips for one-income families will help you find an effective way to make it work.