Living On One Income

When I was a child, my father worked and my mother stayed home to raise us kids. There were definitely advantages to that lifestyle. However, today many families need two incomes to get by. And with the economic downturn, many households are suddenly finding themselves with only one income. Other families had two incomes, but are choosing to have one parent stay home with the kids. It’s estimated that more than 10 million children live in one-income households. Whatever your situation, here are five simple steps to help you become a one-income family.

 

1) Prepare. Pay off your debts, reduce your expenses and begin saving. You might have to reconsider what things in your life are wants as opposed to true needs. Remember that because you are a one-income family, you will save money on things such as childcare. 2) Budget. A budget lets you know how much money you have, what you need to do with it, and how much you need to save. A budget also helps you understand how much you have available to spend on true needs vs. wants. 3) Do a test run. After researching, preparing and budgeting, try out your plan for a month or two. Does it work? Do you need to tweak some of your budget items? Are there areas that you could make changes? This will let you know how realistic your plan is. 4) Build an emergency fund. All families, one-income or two-income, should set aside enough money to cover six months of expenses. This will help cover unexpected expenses or a sudden job loss without creating debt.

 

As you complete these steps, you may actually experience less stress and enjoy life more. You will probably feel new freedom as you discover that your belongings no longer “own” you!