Lots of families live with just one income these days. Single-parent households are increasingly common, and some families have one parent stay home and care for young children while the other is the breadwinner. Another common reason for single-income households is the unemployment rate – in some cases, one parent just hasn’t secured employment after a layoff.
Whatever the reason, there are budget solutions for making a single income work.
Plan Ahead and Develop a Strict Budget
Know exactly what’s coming in and what’s going out. Calculate all your family’s expenses, including utilities, car payments, housing payments, food, entertainment, clothing, cell phones, and everything else you spend during the month.
Planning ahead, if you have advance notice, prepares you for cutting back in certain areas. It’s easier to forego a dinner out at a fancy restaurant when you know well in advance that it means you won’t make your mortgage payment.
Shift Money to Time
With a single income, it’s tougher paying for things like a housekeeper or daycare. Shifting some of your monetary spending to time is possible under many circumstances. For instance, if one income-earner is laid off, have that person complete the household chores instead of paying someone else. Other options include growing your own produce, preparing your own meals at home, and taking on child care responsibilities instead of hiring a babysitter.
Rethink Your Housing Options
Single-income households often make sacrifices for making it work. If it’s more important to you that one parent stays home with your young children, for instance, decide what you’ll sacrifice for making that work. Rethinking your housing options is one solution. Check out apartment ratings in your area and downsize to an ample, but more modest, living arrangement. Liquidating real estate you own provides a cash backup for expenses and emergencies.
Take Advantage of Savings
Image via Flickr by StockMonkeys.com
With a single-income budget, every dollar counts. Things that seemed trivial yesterday can save you a lot of money today. Cut coupons from the Sunday newspaper, take a few minutes and sign up for rewards programs at your local grocery store, and sign up for produce-sharing services in your area. Save on clothing by shopping at discount retailers and finding gently worn items from local families by using sell-and-swap Facebook pages and groups.
Cut Back on Auto Expenses
If you’re in a situation where one parent is staying home, selling one of your cars is an option. You’ll be saving money in fuel that person used to spend traveling to work, and reducing auto insurance and car payments is possible by downsizing to one car. Public transportation may seem like an inconvenience, but you could really save a lot of money.
Monetize a Hobby or Take a Part-Time Job
Whether your family is a single-parent household or a two-parent household with a single income, adding another small stream of income is a possibility. Technology creates opportunities for monetizing hobbies and even part-time or temporary remote work. Put the extra money in savings or use it for special occasions, like birthdays or school shopping.
In the new age, many families can’t imagine living on just one income. Yet there are thousands of families making it work every day. A little pre-planning, savvy spending, and a few sacrifices along the way make it possible to live comfortably on a single income.