Could your family make it on one income?
Even if you’ve always had two breadwinners in your family, the day may come when only one spouse is bringin’ home the bacon.
Whether living on one income is your family’s long-term dream or an unexpected detour, these five tips can help you plan for life on a single salary.
- Do a test run. Practice living on one income. Pretend that a second salary doesn’t exist. Set the second spouse’s paycheck up to automatically filter to your savings and retirement accounts.
- Add it up. Track your income and expenses. Print and look over a few months’ worth of bank and credit card statements to get a grip on where your dollars are going. Use the memo app on your smartphone to record all your purchases (yep, even that candy bar from the gas station!), then copy and paste the info into a spreadsheet at the end of each month.
- Sacrifice, simplify, save. Once you’ve identified what’s busting your budget, think about where you can cut costs. Consider everything from big changes like downsizing your home or selling a car to smaller changes like canceling a gym membership or buying fewer designer clothes.
- Size up savings. If you have the luxury of planning ahead, save six months’ worth of living expenses in an emergency fund. Try to pay off existing debts, especially high-interest credit card debt, before moving to one income. Once you are living on one salary, make it a goal to avoid dipping into retirement savings.
- Dodge the debt trap. Credit cards and personal loans are a temporary solution to a long-term problem. Cutting back in other areas is always wiser than using debt to live.
Going from a dual-income to solo-income household can be challenging, but it is doable for many families. Good luck!
We can help
If you'd like to run numbers or discuss options for living on a single income, visit one of our branches or call us at 1-800-288-3425.