Living on one income can be a scary thought, particularly if it not something you choose to do but is forced upon you due to the loss of a job or other life event. Even if it is totally planned, it can be a daunting thought that a portion of your household income (even if it is not a large portion) will soon not be coming in to help pay the bills.
I know a thing or two about living on one income, as my wife and I have been a one income family for a little over 4 years now and my wife has been a stay at home mom (a very hardworking SAHM, I might add) since that time.
My wife didn’t get fired or laid off, but the circumstances at the time led us to make the choice that she would stay home with our young son, and we were ready for another child as well. The event that led us to make that decision was Hurricane Katrina, as our childcare provider’s house got flooded, and it was a difficult time for trying to find another daycare or sitter with all of the flooding and damage in the area. So we decided my wife would stay at home with our son, and we would start trying to expand our family.
While things have not always gone perfectly, I have managed to learn a few things which seem to make going from two breadwinners to a sole supporter financially a little easier:
Prepare financially, if possible- While you may not always be able to plan things out exactly how you want them to happen- I know we certainly weren’t planning on taking the plunge from 2 incomes to 1 before Hurricane Katrina hit the New Orleans area- if at all possible, take care of any debt, especially credit card debt, and build a healthy emergency fund if possible.
Maintain healthy communication- When you have a significant lifestyle change, such as going from two incomes to one, it is essential to communicate with your husband or wife. No one can read minds, so it is important to discuss you expectations, fears, and other thoughts with your husband or wife to make sure you are on the same page if possible, or at least know where the other person is coming from. This is extremely important if one person has lost their job, as they may be quite upset about it, and may be feeling upset or depressed about it. Not communicating to them can make things even worse.
Manage Expectations- Don’t expect that things will go flawlessly with your finances when your income is reduced. Roadblocks and unexpected financial situations can arise, but if you expect them and prepare for them it can make the transition easier.
Cut back on your spending- even if you feel like you can make do living the same way on one income, cutting back can allow you to save a little more for anything unexpected. Some things that you used to have to pay someone else to do you may be able to do yourself.
Pay extra attention to your finances, especially at the beginning- When making a big change, it is better to err on the side of caution when it comes to the amount of time you spend managing your money and how much you pay attention to your finances. Once you get comfortable with your new income amount, you can get back to your normal routine.
One interesting thing about living on one income vs. being a dual income family is that you may actually not be in such a bad position should you need additional income. The stay at home spouse can pitch in where necessary, working occasionally, part time, or even going back to work full time should the situation warrant it. In a dual income household with two people working full time already, it can be a difficult thing to do something similar as working in addition to a full time job is quite difficult to do.
Do any of you support your family on one income? What tips do you have for someone going from a dual income to a single income?
- Developing A Burning Desire to Improve Your Finances-Part I- Motivation
- Two of the Most Important Work Habits for Increasing Your Income
- How to Prepare for a Hurricane or other Weather Related Emergency
- The Peril of Living Paycheck to Paycheck- Are You One Step Away from a Financial Disaster?