In some marriages, one spouse dreams of staying home while the other works. That’s particularly true of parents with young children.
Living on one income is undoubtedly a challenge, but certainly not an unattainable fantasy — even if you don’t make six figures or more.
Here are 10 tips to make a one-income life work for your family:
1. Have a heart-to-heart with your spouse
Get on the same page as your spouse. Dropping to a single income is a major change that requires lifestyle adjustments by both of you.
Overspending can quickly lead to money troubles and resentment that could irreparably damage your relationship.
2. Create a budget based on one income
Draw up a new budget that assumes one of you is no longer in the workforce. These are a few of the expenses you may be able to cut completely:
- Child care
- Gas/public transportation expenses related to your commute
- Clothes for work
- Lunches and breakfasts on the go
- Mobile phone for work
Then, there are other line items that you can probably reduce. Maybe you can stretch the time between haircuts now that you’re not in an office every day. Or you may have fewer takeout dinners since you’re home to cook.
Some people suggest taking this new budget for a trial run before you actually quit your job, but that many not be practical for some families. Until you actually leave the workforce, you’re going to need to pay for child care and other work-related expenses.
3. Cut the fat in the budget
Now that you have a one-income budget in front of you, what does it look like? Are your expenses far beyond the money your spouse brings in each month? Don’t despair. We’re just getting started here.
Take a second pass on the budget and see where else you can trim. Consider all of the following:
- Eliminating cable television
- Switching to a cheaper cellphone package
- Shopping around for better rates on insurance
- Refinancing your home to bring down the monthly payment
- Packing lunches for your spouse
- Finding cheaper date-night activities
Look at each and every line item with your spouse and ask: Do we need this and, if so, is there a way to pay less? For more inspiration, read this article on how to slash your monthly expenses by $1,000 or more per year.
4. Drop your debt
Perhaps the best way to free up a lot of money in your budget is to get out of debt. If you weren’t making a $300 car payment or sending $200 to credit card companies every month, wouldn’t it be easier to get by on one income?
Think about how you can pay off that debt ASAP. We’ve got some tips to help you get ruthless.
5. Consider becoming a one-car family
Dropping to one car can help you reduce debt and save money. This requires a serious lifestyle change for many families, but it can be worth it.
Getting rid of a car often means:
- Dropping a car payment
- Reducing your insurance premium
- Reducing the amount of gas you buy
- Cutting back on opportunities to shop and spend without planning
This strategy can be extreme, but I have friends who make it work. It’s easiest if you live in an area where you can walk to a friend’s house or a local park. It would also work well if you live in an area with good public transportation.
Think twice if you live in a rural area. It’s no good to feel isolated and overwhelmed being stuck at home all day.
6. Decide whether to downsize your home
Take careful stock of your current home and future plans. If you have empty rooms and aren’t planning to have more kids, then maybe a smaller place is a smart choice. Not only can you end up with a lower mortgage payment, but your utility bills and property tax assessments might shrink, too.
7. Sell what you can to create a cushion
Chances are you have plenty of stuff in your house you can sell. Doing so gives you a nice cushion in your bank account before leaving your job. No matter how well you think through your budget, something could throw you for a loop.
Your emergency fund is going to smooth out any wrinkles in your budget. So sell your old, unwanted stuff for top dollar and bank the cash.