How To Budget To Live On One Income
Living on one income is a reality for millions of families. However, the arrival of being able to live on one income varies. Some have one person in the home with a high-paying job where they make more than enough money to survive on one income, while others have saved for many years to make that dream a reality.
If one of your desires is to thrive on one income, there are steps that you can take to try to make that dream actually happen. While it may not be easy, it is possible. Consider trying a few of these tips and suggestions for how to budget to live on one income.
Know and understand your debt.
If you are in debt by a huge amount, you have to be realistic. This is something to consider before deciding if one income is right for you, or even an option. Calculate the amount of debt that you have and add that number up. Take a good long hard look at that number. Then, look at what your payments are each month for that debt. List them from the ones that are soonest to be paid off, to the ones that will be around for many years.
Identify your expenses.
Understand how much you spend each month on your regular bills such as groceries, utilities, insurance, cell phones, etc. Basically, anything that you pay a required bill for each and every month should be in this category. Write out those amounts. If the bill varies in total, it's always best to overestimate than underestimate in terms of budgets and money.
Check your bank account.
Look at your bank statements over the past 6 months. Identify what else you spend your money on outside of your debt and your other required monthly bills. Break those costs down into categories such as clothes, restaurants, fun outings and figure out ways from those numbers that you can cut costs.
Once you understand what your money obligations and debt are, you can start to budget and prepare for ways to be able to live on one income. While the want for one income may not be able to happen immediately, there are ways to start preparing for it for when it can happen in the future.
Here are a few suggestions:
- Stop spending on items that you don't need. Cut down on those extra costs like going out to eat or shopping for clothes all the time.
- Start saving for an emergency fund. With the money that you are saving by not spending it on clothes or eating out, you can start putting a portion of that money into the start of an emergency fund.
- Pay down on your debt. While saving for your emergency fund is important, so is also being able to start paying down on that debt. Apply as much money as possible to get rid of that looming debt. Being debt free is your key to living on one income!
- Be certain that everyone in the family is on the same page for your new financial plan. If it is a divided house, the budget won't be solid enough to really make an impact on the savings game.
- Stop using those credit cards! The number one way to get out of debt, is to stop using the resources that keep putting you back in that debt. Cut them up, shred 'em, whatever you need to do...but don't be tempted by them to keep using them over and over.
- Be patient. While the want to live on one income may seem urgent, it needs to happen when the timing is right and when your household is financially prepared to make that leap. Making that change before you are ready, may cause more debt to happen due to lack of being prepared.
Living on one income is a real possibility and it can be something that can be in your near future. With a little patience, talking and planning you may soon be able to survive and thrive in your household by only having one income.
While the topics discussed were just suggestions, some may be a great fit for you. Start by taking a step in the right direction and start planning for that financial freedom that you have been searching for.
Do you have any tips that worked well for you? Comment below!