Need to make a Budget for living on one income? Check out these tips!
Living off of one income isn't easy. In fact, most people believe it isn't possible. But like anything else in life, choosing to be a one income family is about living the life we've chosen for ourselves rather than trying to live up to someone else's standard.
It's common to think that living on one income is only viable if the income is over a specific amount. But before I started this blog, our family lived on one very low income. As in, at times we were below the poverty line, depending on how many overtime shifts my husband was able to work in a given week.
It was definitely a learning process for us but lucky for you, I'm going to give you the nitty gritty! If you are already living on one income and barely making ends meet, feel free to check out the table of contents below so that you can skip ahead to the parts that will be helpful to you!
I am Preparing to Quit my job
If you haven't quit your job yet then you're already ahead of the game! That's great! Before my first child was born, I spent several months trying to get a healthy amount into our savings account. Looking back, I wish I would have focused a bit more of my efforts in some other areas but some of these things never even occured to me until after the baby was born. So I'm going to help you learn from my mistakes!
1. Create a One Income Budget.
If you're planning to live on one income, you'll need to sit down with your budget and start making adjustments. Start by writing down everything thats a necessity and the average amount your spending on it each month. If you aren't the organized type, you may need to go back through you bank account and search for each of the transactions.
When we began creating our budget, we sifted through all of the transactions in our bank account and wrote down all of our debts, utilities, subscriptions, food and necessities, and extras. Then we figured out what we could cut out to get our budget within my husband's regular income.
2. Down Size if Possible
Wherever possible, you should start looking for ways to cut your budget. That could be as simple as getting rid of cable or possibly something more elaborate, like moving into a smaller home. Keep in mind that smaller doesn't have to mean less bedrooms or even less square footage! If the home your living in has large open spaces and high ceilings, it can cost quite a bit more on your utility bills! Also, contrary to popular belief, having a small home may actually make your housekeeping duties easier!
It may seem a bit counter intuitive to move into a smaller home, or you might even feel like it's admitting defeat. But living within your budget will feel more enjoyable and give you the ability to do more, have more and go more. So don't dismiss this idea too quickly. If downsizing is an option at all - it's seriously worth considering!
3. Start Living on a One Income Budget Today
Living off one income will be easier if you practice first! Whenever we sit down to make a budget, we often overlook little things that aren't regular expenses, i.e. - birthday presents, doctor's visits etc. If you start living on one income before you have to then unexpected expenses won't throw your budget into a downward spiral and you will be able to more accurately prepare yourself for what to expect!
Also, you're going to need that second income for these next tips!
4. Pay off large debts if possible
Now that you have one income freed up, use it to start paying off debts, especially ones with large monthly payments. Always be practical though and shoot for ones you can actually pay off before you quit. For example, you may have several small credit cards that add up to $100 a month worth of bills. If you can use your current income to get rid of that bill, you are automatically adding wiggle room to your new budget!
If you are able to pay off an even larger debt, like a car payment, that could make your one income budget quite a bit roomier. Some people may even consider getting a temporary part-time job to pay off a large debt! Those months of working two jobs are hard, but its all about prespective, being able to to quit your job to stay at home with your kids or pursue a dream is well worth a few months of double shifts!
5. Put money in Savings
This one is not exactly groundbreaking but it needs to be said! Being a one-income family means that you need a little something squirreled away for a rainy day. Especially if you have kids! Kids come with emergencies and extra expenditures like broken arms and braces. The best way to prepare for this is to start putting some of your current income in a savings account. If your currently able to put a larger sum away for a rainy day, consider investing it in a money market or something similar. These types of accounts aren't risky and don't lock your money down for a required amount of time like other types of investments but they pay higher interest than a savings account. Not to mention - it's much harder for you to dip into this type of account when you're feeling a need for a little retail therapy.
You might be saying: That's all well and good but:
I Already Quit my Job
If you're already living off one income and your struggling to make ends meet... don't worry! I've got some great suggestions for you too!
1. Put money in Savings
I know what your thinking. But I promise you that this is possible. If you are reading this right after getting paid, you may agree with me. But if payday is still a few days away and there's a shut-off notice hanging on the fridge, you're probably rolling your eyes right now.
Think of it this way: If your monthly bring home pay suddenly went down by $50, you'd adapt. You wouldn't have a choice. You wouldn't like it but you would adapt. In the same way, if you start putting $25 per paycheck directly into a savings account, you'll find that this will actually help balance your check book in the long run.
And this is why: No matter how many budgets we make, unforseen expenses crop up. If we don't have any other place to pull them from, something will most likely go unpaid. Next month, that bill will be doubled plus a late fee and possibly added interest. It's a downward spiral. If you can get on top of that spiral by putting money into a saving account. You'll be off of the defensive line and can start making forward progress!
2. Get rid of frivilous expenses
In most cases, paying for things like cable television and unlimited data plans aren't actually a necessity. Although getting rid of services that you are comfortable with may not be your first choice, living on one income means making some sacrifices. Besides, you may find it easier than you think to switch to a prepaid phone. Companies like Straight-talk and t-mobile offer quality prepaid service for half the price of a typical phone plan!
As cable goes, we found that getting rid of cable internet wasn't doable for our family, but television was not a necessity. With streaming services being so popular these days, it's amazing that cable companies haven't dropped their prices! This post gives great info about what streaming service will be a good fit for you. Our family prefers to use Amazon Instant Video because it comes free with our prime account for free and for a few extra dollars we can upgrade to include some of our favorite channels and networks. Some even play live TV!
3. Ask for a raise
In some Jobs, raises are scheduled at regular intervals and asking for one isn't an option - this is specifically true of jobs run by state and federal organizations. However, in most cases, asking for a raise isn't out of the realm of possibility. If you're planning to scale down to one income, it's important to make sure you're getting as much as you possibly can.
HOW TO ASK FOR A RAISE: Learning how to ask for a raise is a really important part of making this tip successful. It's important to make yourself valuable to your employer and to be able to point out that value in a non-arrogant way. CJ Holmes has a great eBook called: The Ultimate Guide to Getting a Pay Raise at work. Basically, the book gives tips and techniques to get your boss to see you as valuable and give you a pay raise within 90 days. You can grab it from Amazon or Audible, or read it free with Kindle Unlimited!
4. Plan your meals
Meal planning is INCREDIBLY important when living on one income. And honestly, it doesn't have to be as hard as it sounds. Before you begin meal planning, write down what you actually eat for an entire week. If you typically stop for burgers and fries a few times a week, then go ahead and put hamburger paties and french fries on the shopping list and make sure you buy enough to have that meal twice.
In a perfect world, every night of the week would be a fancy, healthy, gourmet meal. But your goal here isn't to be perfect. Your goal is to be frugal. That doesn't mean you have to eat spaghetti 6 days a week either. Steer clear of pre-made meals (especially the ones from the freezer section). Stick to simple meat, veggies, dairy (in moderaton), and grains. You'll find your grocery budget instantly drops!
5. Do your Shopping Online
Walmart's online grocery shopping feature makes sticking to a food budget so easy! At checkout You can easily exchange items from your cart without embarassment when you realize you've gone over budget. Plus, if your not hurrying around a store with kids screaming in your ears, it's a lot easier to focus on making good choices, both financially and health-wise! As a bonus, the app keeps track of your orders to make it exceptionally easy to reorder it again and again, which means you can set up a meal plan once, and literally have your grocery shopping on autopilot! I like to keep this little grocery notepad on the fridge. Once every other week I sit down with my "list" and simply drop them into my walmart cart. (If you can't tell... I am absolutely in LOVE with this service!)
PS: You can get ten dollars off your first time order with this LINK.
6. Consider a Buying in Bulk
Bulk stores like, BJ's, Cost-Co, and Sam's Club have been offering bulk discounts for decades. But in my opinion, the Subscribe and Save feature from Amazon blows them all out of the water. Not only does Amazon offer bulk discounts but you will set them up to be automatically sent out in regular intervals. I like to set mine up on a six month cycle so I have different bulk items coming each month.
This way I don't have large amounts of money going out on any one month. I can budget a specific amount for items like papertowels, toilet paper, shampoo and condition. Plus, it helps to cut down on stress, knowing that I'll always have these things in stock!
7. Avoid Coupons
When we are on a tight budget, we are always looking for a deal. But unless you are an extreme couponer, then coupons are more likely to hurt your budget than to help it. Most likely you'll find yourself purchasing things you don't need or like.
Instead of using a coupons try using a rebate app like eBates. I installed the browser extension and now it pops-up to alert me whenever there's cash back on something I'm buying anyway! Umm- yes please!
(You can sign up for eBates HERE and don't forget to get the browser extension!)
The one downfall with eBates is that you can't use it in store. Simply fix: I keep the iBotta App on my phone for in store purchases. AFTER shopping, you simply scan your receipt and the app automatically gives you discounts for any items that qalify! You can sign up for iBotta Here.
7. Get new quotes on your Insurance.
Most people pay more for insurance than they should simply because they don't make an effort to check rates regularly. You could reduce your home, life, car or even medical insurance by a significant amount just by asking around for new quotes! Services like Quote Genius are great for shopping around without entering your information multiple times.
8. Ask for a deferment
When living off one income, it's often possible to have payments deferred on multiple types of loans. For your car payment, many companies will allow you to defer one payment per year as long as your regular payments are on time.
For student loans, you can apply for an income based payment plan, a forebearance, or a deferment. Keep in mind that deferring payments will add to the overall total because the interest on that amount will continue to build.
9. Apply for assistance
Most states offer assistance for nearly all of the necessities. If you've already cut out all of your frivilous expenses and your income is still too low to make ends meet, there's a good chance you qualify for some sort of assistance. This isn't an ideal solution but in some cases, having a second income isn't even an option.
In my state, energy assistance will wipe out your past due amount and allow you to start over with a clean slate. The back due balance gets paid off by the assistance program in increments as you pay off your balance. There are also programs for housing and childcare assistance if needed. There are even programs like WIC that give you money for food if you are pregnant or have young children. Some programs have surprisingly high income guidelines!
To find these programs simply go to google or bing and type in the type of assistance program your looking for and your state's name. For example "Energy assistance programs in Pennsylvania".
10. Ask for help from your local church or charity
If you're already in crisis mode and you can't pay your bills, your local church may be able to help out with that. Many churches will pay electric bills, water bills, etc. All you have to do is ask! At worst, they will say no and you're no worse off than you were to start with.
Charities, like your local food pantry, may also be willing to help by bringing you food or clothes. Keep in mind, this isn't something you should count on. Instead, this type of service if for extenuating circumstances and is meant to help you get back on top of your finances.
Done all this and you're still struggling? Consider this!
If you've already tried all of these tips and you still can't make ends meet. You may want to consider a home based job or a side hustle. Home based jobs can be anything from babysitting to home-based customer service postions. A side hustle is a less consistent source of income that usually consists of doing small tasks. You can check out this post for a huge list of Work From Home jobs that you can do from your smart phone!