How to Go from Two Incomes to One
There are a lot of reasons for going from two incomes to one. Whether your family has made this decision so that one parent can be at home with the kids, to a change in careers or because of job loss or divorce, many of the steps to get a one-income family budget on track are the same.
How Much Are You Losing?
Start planning by figuring out how much money you’ll need to make up each month to maintain your standard of living. That comes in two steps:
- Do the math: Subtract how much you spend from how much you make to determine the amount that you need to make up without that second income and still get by. For instance, a family that makes $80,000 a year between a $50,000 and a $30,000 income would make about $3,076 every two weeks before taxes. If you lose the $30,000, that’s $1,153 to make up every two weeks to maintain the same standard of living.
- Assess your spending: It’s not always pretty, but taking a careful, honest look at how you spend your money is an important first step. Use this budget worksheet or one like it to paint a clear picture of where each dollar goes every month. You may discover that you spend a lot more money than you realized on dining out, subscription boxes, home entertainment and more than you thought.
Once you’ve evaluated your spending, you can make a plan for what spending items can be cut without affecting the quality of life for your family too much. Big moviegoers? Pass on the theater and invest in Netflix or budget in one trip to the drive-in per month where the whole family can see three movies for far less. Spend a lot of time on this part to ensure that living on one income isn’t a big bummer.
Don’t Forget to Save
When you’re rolling with a tight budget, a surprise can be disastrous. Bathroom flooded? Refrigerator losing its cool? Car suddenly needs a new bumper and taillight? Accidents happen all the time and can be really expensive. If you don’t have any savings, you start racking up credit card debt and can get into a lot of trouble very fast. So even if it’s just $20-30 a month, do your best to save and prevent getting stuck between a rock and a hard place.
Learn How to Make Up Lost Income
After analyzing your situation and making as many cuts as you could, maybe you still have a couple hundred dollars a months to account for. There are plenty of ways make a little extra cash on the side and even more ways to learn to save.
- Learn to coupon
- Shop at consignment stores
- Sell on Etsy
If you’re just starting to learn to save, you’re in the right spot. Read more of our blogs to learn helpful hints on how to coupon, DIY projects and more. Check out our site for coupons that can save you big on groceries.
Got Kids? They Grow
Their clothes get too small fast. It’s hard to keep up with their wardrobes on two incomes. One of the handiest and growing trends is the consignment store. Popping up throughout cities across the country and online, you can get gently used clothing for your kids for cheap. Even better, many of the stores encourage you to bring in your own gently used clothing, toys, bedding, etc., as trade items to get merchandise for free!!! I just went to my local consignment store last week and traded in maternity clothes and toys and got my girls’ summer wardrobes for $17.
Embrace your talents and sell crafts on Etsy or look for freelance work you can do from home. There are plenty of things people need help with. Just search online jobs and sort through the sea of offers to find something right for you.
Going down to one income can be the best decision you’ll ever make for your family so that someone can be home with the kids, saving on daycare costs and getting to make memories otherwise tougher to make. If you balance your budget right, you can easily get by with minimal sacrifices and just a little extra work.