Are you wondering how to live on one income? If you’re trying to make this financial leap, you know how intimidating it can be.
After all, when you’re used to living on two incomes as a couple, your expenses typically expand to reflect that.
As a result, it can be difficult to pare down your spending and adjust to living on less money.
But here’s the good news: living on one income is entirely possible.
While it may not be the easiest financial route, plenty of couples do it–my wife and I included.
And if we can do it, so can you!
But how, exactly, should you go about it? And, are there any strategies you can use to make it easier?
In this post, I’ve compiled the 9 strategies we use to not just survive, but thrive on one income.
Let’s dive in!
If you want to live on one income and support your family, you need to have complete and total control of your money.
In other words, you need to create a specific plan for every dollar of your income.
From saving to giving to paying for all your various expenses, if you don’t know exactly where your money is going, it will be extremely difficult to live on a single income.
For that reason, if you’re not yet living on a zero-based budget, now is the time to start!
In case you’re unfamiliar with zero-based budgeting, it involves creating a plan for how you’ll spend each and every dollar at the beginning of each month.
By having a plan for where your money’s going, you’ll ensure you always have enough to cover your expenses.
Also, creating a budget will help you identify spending areas where you need to cut back.
On a zero-based budget, your income minus your giving, saving/investing, and expenses should equal zero.
To create a zero-based budget for one income, start by determining exactly how much money you’ll be earning every month.
Then, categorize your anticipated expenses.
You should have a line in your budget for every dollar you plan on spending. For example, your categories may include the following:
- Medical Expenses
- Fun Money
Everyone’s spending habits are different, so your expense categories may not be the exact same as someone else’s.
Beyond that, within each category, you should lay out the specific expenses you will need to throughout the month.
Then, to make sure you stay on course with your budget, log your expenses daily.
That way, you won’t have to wait until the end of the month to find out if you overspent. In other words, you can make real-time adjustments to your budget to make sure you live within your one-income-means.
Want to learn more about budgeting? Check out a few of our other popular posts:
- Zero-Based Budgeting: What Is It? And How To Do It?
- 7 Budgeting Skills That Will Make You Rich
- The #1 Key To A Successful Budget
- 21 Simple Tips To Make Budgeting Easy
- Why Is Budgeting Important? 10 Key Benefits
- 7 Budgeting Tips For Singles [Save Money And Enjoy Life!]
- How To Stick To Your Budget: 21 Simple Tips
One of the biggest obstacles to being able to live on one income is consumer debt.
After all, the fewer debt payments you have to make, the more financial margin you will have—and the easier your financial situation will be.
Therefore, even if you only have one income, paying off your debt should remain a high priority.
In fact, it should become an even greater priority than when you were living on two incomes.
To get out of debt, we recommend using the debt snowball method.
Start by listing out your debts and ordering them from smallest to largest. Don’t pay attention to interest rates – only consider the amount you owe.
Then, only make minimum payments on all your debts except for the smallest one. For your smallest debt, pay off as much as you possibly can each month. Then, every time you retire a debt, just roll the payment you were making for that debt into the next largest debt on your list.
Repeat this month after month until all of your debts are paid off.
This is the debt payoff method my wife and I used, and it helped us pay off $34K of debt in six months.
The goal with the debt snowball method is to experience some success on your debt payoff journey to encourage you to keep going.
Just like a snowball rolling down a hill, your debt repayment efforts will grow momentum and speed until you have no debt left.
And when you’re out of debt, you’ll be amazed how much easier it is to live on one income.
Are you tired of spending your paycheck on debt payments? If so, here are a few posts to help you kiss your debt goodbye:
- 21 Tips To Pay Off Credit Card Debt FAST
- Is Being Debt-Free Worth It? 10 Key Benefits
- How To Get Out Of Debt Fast (Even On A Low Income)
- Should I Sell My Car To Pay Off Debt?
- The Dangers Of Debt: 13 Reasons You Should Avoid It At All Costs
- Save Money Or Pay Off Debt? (Here’s What We Did)
Another top financial priority for couples who live on one income is saving an emergency fund.
According to a survey by Bankrate, 61% of Americans would not be able to afford a $1,000 emergency. Do your best not to be one of them!
When it comes to planning for emergencies, the question is always when, not if, they will happen.
You may prefer not to think about the possibility of needing to replace an appliance or covering an unexpected medical expense. But, unless you prepare your budget for the unexpected, you’ll be in a difficult financial situation when an emergency happens.
For couples living on one income, we recommend saving enough money to cover six months of living expenses.
This way, if your one source of income changes or goes away, you’ll have time to look for a new job or find a way to replace that lost income.
To reach your savings goal, create a savings category in your budget, and be sure to stick to it every month. You could even set up automatic transfers on the first of each month to make it easier on yourself.
Additionally, we recommend opening a savings account at a completely separate bank than you use for your checking account, and using it to store your emergency fund.
This will keep your savings out-of-sight, and make you less likely to use it for something other than an emergency.
If you’re looking for a great savings account, check out our recommended personal finance tools.
Credit cards can turn a few seemingly innocent shopping trips into years of financial misery.
After all, they allow you to spend money you don’t have, and they charge extremely high interest rates.
So do yourself a favor and eliminate this obstacle altogether.
Without a credit card, it won’t even be possible for you to spend money you don’t have. Instead, you’ll be limited to the cash in your pocket (or in your checking account).
By eliminating this potential source of financial strain, you and your spouse will be much better off.
You won’t have to worry about whether you can afford to pay off your credit cards every month because you’ll have paid for every item in your budget with cash.
Additionally, when you only use your debit card (or cash) to make purchases, it simplifies your entire financial life.
Think of it this way, if you only ever use your debit card, you never have to worry about paying off a credit card before interest accrues.
Plus, you only have to log into one account to know exactly where your finances stand.
While not using a credit card may sound foreign to some people, the level of freedom it affords is well worth it.
Seriously, my wife and I cut up all our credit cards a few years back, and it was one of the most beneficial financial moves we ever made.
I honestly believe that if you want to live on one income as a family, credit cards are pretty much your worst enemy.
It’s no secret that cooking your meals at home is much cheaper than going out to eat at restaurants.
Food spending tends to be a large expense for couples, so the more you can cut costs in this area, the better off you’ll be.
Couples living on two incomes usually have a lot less free time than single-income couples. When both partners are working, convenience is the priority. So eating at restaurants or ordering takeout is sometimes a necessity.
But now that you’re living on a single income, time is on your side.
While you may not have as much income as you used to, you probably have more free time.
Since one of you isn’t working, take advantage of this extra time by planning and preparing your meals at home.
This can end up saving you hundreds of dollars every month.
And, as a bonus, you’ll likely be eating healthier, and you’ll have the opportunity to gain new cooking skills.
Want to get better at meal planning and reduce your food spending? Here are some posts to help you conquer your food budget every month:
- 25 Tips For Living On A Food Budget
- 15 Key Benefits Of Meal Planning (We Save $6,000 Per Year)
- 25 Life Skills That Will Save You Money
- 11 Tips For Meal Planning On A Budget
- How Much Should I Budget For Food?
As you make the shift to one income, evaluate your fixed expenses.
This could include your rent, car insurance, cell phone plans, internet and cable bill, and more.
Consider any expense that’s consistent and recurring every month.
Then, go through your fixed expenses line by line, and ask yourself the following questions:
- Do I need this expense?
- Am I fully utilizing this product or service every month? (For example, if you have a phone plan that includes unlimited data, are you actually using enough data to justify it?)
- What value does this expense add to my life?
- What are some possible ways I could reduce this expense?
- Are there similar products or services available that cost less?
Be honest with yourself and cut out or reduce costs wherever possible.
For example, if you’re paying for a gym membership but haven’t been to the gym in weeks, it’s time to cancel.
You may also decide to sacrifice certain subscriptions and services that aren’t completely necessary.
This, of course, will involve making some changes to your habits and lifestyle. But if your goal is to live on one income, certain sacrifices may be worth it.
The more you can reduce your fixed expenses, the more room you’ll have to work within your budget.
- Top 10 Ways To Reduce Your Fixed Expenses
- 7 Best Ways To Save Money On Car Expenses
- 10 Best Ways To Lower Your Car Insurance Costs
- 3 Types Of Expenses (Fixed, Periodic and Variable)
- 10 Reasons Why You Should Track Your Expenses
If there’s one expense that eats most of your budget, we’re willing to bet it’s your cost of living. Whether you’re renting or paying a mortgage, putting a roof over your head isn’t cheap!
According to Dave Ramsey, your rent should cost no more than 25% of your take-home pay—and I fully agree with this!
While you may love where you live, it’s a good idea to consider whether you can live more cheaply by moving someplace else.
If you’re restricted by the location of your or your spouse’s job, shop around locally for cheaper rent or consider downsizing.
If your one income comes from a job that can be done remotely, you have the freedom to live anywhere! If you live in a state where the cost of living is especially high, consider how much money you could save by moving to a less expensive location.
While moving may seem like a drastic change, it can make living on one income as a family much easier.
Reducing your expenses is the first thing you should do if you want to live on one income. But it’s not the only way to make it work.
To increase your income and create more room in your budget, start a side hustle from home.
Even a side hustle that brings home a few hundred dollars per month can help cover the cost of groceries, contribute to your debt snowball, or bolster your emergency fund.
This tip may not work for everyone, but most people can find a few hours each day to work on a side hustle.
Just like you create a budget for your money, you can create a budget for your time and commit to putting in consistent effort.
Even if you’re caring for children and don’t have a lot of time during the day, you can build a lucrative side business. Wake up an hour earlier than your kids or work while they’re napping.
These days, it’s easier than ever to monetize your skills.
You can open an Etsy shop, start a blog (this is the option we chose), provide virtual assistance to businesses, or freelance to bring in some extra money.
There’s no limit to the ways you can earn money with a side hustle.
Are you ready to start your own side hustle and start fueling your income? Here are a few helpful posts to get you started:
- 18 Proven Ways To Make Money With A WordPress Blog
- 15 Ways To Make Money With A Laptop And Internet
- 22 Summer Side Hustles [Earn $1,000+ Per Month]
- 9 Lucrative Freelance Skills You Can ACTUALLY Learn Online
- 7 Best Ways To Monetize Your Skills And Hobbies
- 5 Ways To Make Money Online (For Beginners)
- How Do Blogs Make Money (10 Proven Ways)
Learning to live on one income may be a challenge, but it can also open your eyes to what’s truly important in life.
There’s a limit to the happiness you can receive from possessions.
As you learn to navigate this new season of life, you may discover a new appreciation for the things money can’t buy.
Remember to reflect on the positive effects of having a single income.
Has it allowed you to spend more special moments with your children?
Has it caused you to change your lifestyle for the better?
Acknowledging the benefits of living on one income will help you stay positive and appreciate your new lifestyle.
With the help of these tips and some determination, you and your spouse or family can live on one income happily. It may not always be easy, but it’s definitely doable!
Remember, you don’t have to have two incomes to survive and live well.
We hope these tips help you thrive as a couple living on one income!