Can you really live on one income without feeling poor? Well, yes! So long you set yourself up for success.
There are a variety of reasons to become a single-income household: from wanting to cut out child care expenses and spend time with your kids, losing a job, divorce, disability, or just wanting to reach financial independence sooner and retire early.
We have been living as a single-income family for the last 9 years. It became the right choice for our family when I was pregnant with our second child.
I was still working full-time while grandma took care of our oldest. With a second on the way, there was no way grandma would be able to handle 2 babies on her own all day. We’d either have to pay for a babysitter, or I would have to stay home.
My RA (Rheumatoid Arthritis) was getting worse, making it harder to work plus it was miserable for me to leave my little one each morning. So, when I was 7 months pregnant, we decided to see if we could do it.
Build a Strong Emergency Fund
While I was still working the last few months, we tried living on just Mr. Bean’s salary. All of the money from my paycheck went straight to savings.
Having a strong emergency fund will help you pay for those emergencies that always pop up with cash, allowing you to stay away from credit card debt.
Inevitably, shortly after we became a one-income household, our son had an allergic reaction to medication while he had pneumonia! It required an ambulance ride and an overnight hospital stay.
Even after insurance and hefty financial assistance from the hospital, we still had to pay hundreds of dollars in medical bills. Our emergency fund saved us from taking on credit card debt.
If you’re thinking about becoming a single-income household, try to build up a 6-12 month emergency fund. It might take a lot of work but it can make all the difference.
Create a Realistic Budget to Live on One Income
When it comes to becoming a one-income family, budgeting is one of the most essential parts.
Living on a single income means that you need to know where every dollar goes and maximize it to get the most out of it.
Sit down with your spouse and a detailed list of all your monthly spending. Write down monthly, quarterly, and annual bills. Check credit card and bank statements. Learn how you currently spend your money.
Maybe, as a dual-income family now, you go out to dinner multiple times a week. Both of you spending long hours at work makes dinner prep difficult so the drive-thru is your best friend.
If you become a single-income household, one spouse might be able to get dinner made most nights, cutting your eat-out budget drastically.
Look at how you can tweak your budget to see if you can make it work on one income. If it would really be a stretch, or not at all possible, start looking at changes you can make both big and small. From moving to a different neighborhood or getting a new job to cutting out manicures and buying holiday throw pillows every Target trip.
Don’t Pay More Than Your Have to For Household Expenses
In order to stretch our budget, we are very careful to cut out any unnecessary expenses without sacrificing our lifestyle.
- Ditch Expensive Cell Service– find a discount provider and only pay for what you actually need. The kids and I are often home when using devices and Mr. Bean can’t use his personal phone at work so we don’t really need a lot of Data. We pay just $42 a month for 3 lines with Tello Mobile.
- Stop Paying for Cable– we watch a decent amount of TV but I refuse to pay $100+ for the privilege. Instead, we use TV subscriptions like Netflix, Disney +, and Hulu. The secret is, we only subscribe to one service a month. If there’s a show someone really wants to watch on a different service, we cancel the subscription the next month and change over. This way, we never spend more than $10 a month on TV.
- Only Get The Internet You Need– In our area, the different internet companies offer a variety of packages and the prices range dramatically. Just like with Phones and TV, we only get the plan that we NEED. If the internet company wants to upgrade us for free, we won’t turn it down.
What other types of unnecessary expenses do you have that you could cut down or eliminate without really changing your lifestyle?
Learn To Cook
When we were younger DINKS (Dual Income, No Kids) we loved going out to eat multiple times a week but when we became a single-income family of 4, eating out was one of the first things to go. But we still LOVE FOOD.
I have found that most ethnic dishes at the restaurants we enjoy are actually really easy to make if you know how to do it.
Over the years, I have learned how to make things like Thai fried tofu and sticky rice, Japanese curry, and Tex-Mex Veggie Tacos.
By reading food blogs, watching YouTube, or even just asking neighbors you can learn how to make some of your favorite foods for just a fraction of the cost of a restaurant meal.
And by cutting down on the number of meals you have at restaurants, every time you do will be that much more enjoyable. Or not. We are so spoiled with meals at home now, we rarely even enjoy the hassle of going to a restaurant except for the occasional take-out for a special occasion.
Find Ways to Create Extra Income
Even if you can easily live on one spouse’s income, it is always a good idea to have a second source of income. You never know what could happen:
- Job Loss
- Medical Emergencies
- Sudden Divorce (Stay-at-Home Parents Should Always Ensure Financial Security)
Some Extra Income Ideas
- Maybe a stay-at-home parent could take on babysitting a few extra kids a few days a week.
- Get a part-time customer service job, either Work From Home or spending a few hours in a shop. (Great for the adult human contact many stay-at-home parents crave)
- Start an online store or business
- Sell services or products that you are good at from tamales or cupcakes on Facebook marketplace to Closet Organization Services
The extra income can go towards savings, investments, or extra fun activities.
Make Sure to Contribute to Your Spousal IRA
If one working spouse makes at least $13,000 annually in taxable income, BOTH spouses are eligible to contribute to their own individual IRAs (Individual Retirement Accounts).
Make sure to take advantage of this. Set up an IRA (or Roth IRA) in the non-working spouse’s name and contribute up to the annual max. This is extra tax-advantaged money for you both in the future.
Stay Active and Involved
If you are making a big effort to cut out expenses and become a single-income home, dealing with all the cuts to your budget can become depressing if you cut too far. Make sure to keep fun in your life.
My kids love taking classes and participating in sports but there’s no way we can justify spending hundreds of dollars every month for extracurricular activities. So we come up with creative ways to fill our wants:
- Take advantage of the Local Parks and Rec- Our Parks and Rec offer some amazing classes from Basketball and After School Homework Help to World Culture and Cooking
- Look for Opportunities to Barter- Mr. Bean teaches Jiu-Jitsu at our local academy in exchange for free classes for him and the kids. Maybe offer to make custom pizzas for your friend’s party in exchange for a free manicure at her shop. There are so many options if you look for them.
- Love Your Local Library- Many of us forget about libraries but they are wonderful places, and they’re free! Borrow books, movies, toys, and puzzles. Some libraries even have museum tickets! And if your librarian is awesome like ours, activities and events for the kids like magic shows and Halloween Parties.
Go On Trips
One of my favorite ways to feel rich is to go on vacation. But if you’re trying to stretch every dollar a 10-day Carribian Cruise might be out of the question.
But there are still options:
- A camping trip in a local state park might be perfect.
- Visit family members you can stay with. This can be a great way to stay connected AND enjoy some time away. (It might make you appreciate your own space a bit more too)
- Enjoy a Staycation- We often forget about the cool things in our own town.
- If you live anywhere near a resort area, a neat trick we enjoy is attending timeshare presentations in exchange for free trips.
And if you can squeeze it into the budget, save a little bit each month towards a dream trip. It’s been 9 long years, but we’re finally taking the kids to Disneyland in the spring of 2023!
Due to the cost and our hatred of large crowds, it will probably be a once-in-a-lifetime experience but because of that, I’m sure our kids will remember it.
Wrap Up
Living on a single income is becoming harder and harder these days. But if it is the right choice for your family, make it happen!
In addition to budgeting, saving, cooking, bartering, and making sure to have fun, one of the biggest factors to success is surrounding yourself with the right community.
Find friends and neighbors who lead a more frugal lifestyle. Get rid of toxic people who encourage you to spend money on things you don’t need forcing you to make more money when your priorities are elsewhere.
Turn off social media posts that encourage spending on excess and follow people and pages that encourage the lifestyle you want for your family. Like this one!
What do you think? Do you have dreams of a single-income household? Have you achieved one? What are some tips and tricks you use? Leave a comment below!
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Great Post!
We’ve been thinking about becoming a 1 income household.
The part about remaining financially secure as the stay-at-home half really spoke to me. It would be wise to start an at-home business to continue practicing those money-making muscles.
What are your thoughts on cutting back on 401k contributions (beyond employer match) to allow more room for liquid cash in the budget?
Thank you, Katherine! This topic is near and dear to me.
Regarding cutting back on 401K contributions, beyond employer match, it all depends on your long-term goals and how tight your budget is. If becoming a stay-at-home parent is your goal, it makes sense to cut back on 401k contributions for now so that you can build the safety net/ emergency fund you need to make the leap.
When I first started staying home, we had a very tight budget while we adapted to our new spending habits. But over the years, Mr. Bean got promotions at work and we both took on side work. That extra income went straight to retirement investments to make up for the first few years of me being home.
And it is so important that the stay-at-home half continue to be financially stable. IRA investments, credit in your name, and income, no matter how small can make a huge different in your own financial stability should something ever happen.
Best of luck in making the leap if it is the right decision for your family 🙂
Good luck.
Thanks. We’ve been doing it for the last 10 years and it’s working well so far 🙂