Deciding to Live on One Income

A lot of people forget that just a few decades ago, households were ran differently. Men were the primary providers and breadwinners while women were the homemakers, cooking, cleaning, and raising children. In today’s society, it is more of the norm that families have chosen to have both spouses working, bringing in dual income. This has allowed people to live different lifestyles and afford more luxuries. Although this is now the case with many families, there are some who would like to go back to the previous trend: 1 breadwinner, 1 stay at home parent. Maybe one spouse gets laid off, maybe you decide child care would be best with 1 parent at home, or maybe someone wants to finish their education. Whatever the case may be, there’s a transition period. Here are the steps to living on one income when you’re used to two:

Have the talk: Even if you have your mind made up, this is a joint decision. Discuss the options with your partner. Express your feelings and ask that they give their opinion as well. Maybe you’ll decide the husband will provide or maybe it’ll be the wife. Discuss which job will afford the lifestyle you’re looking for. This includes income, benefits, and schedule. Crunch the numbers: If you’re going from 2 incomes down to 1, you can go into financial shock. You’ll want to sit down and analyze your budget. Figure out your current expenses, see how much income you’ll expect to see with only one working spouse. Decide what you can afford and what you can’t. Will you be able to reach your financial goals like vacations or retirement? Do you expect to have more children? Calculate all these instances in your budget. Start downsizing: There are going to be things you won’t need or be able to afford on one income that you could with two. Maybe you don’t need that second car. You might not need a house with 2 guest rooms if it’s costing you more a month. You start to realize cable watches you more than you watch it. Start trimming the fat of your budget, and only keep things that you absolutely need. Save and reduce: On one income, you’ll have less money to handle emergencies should they arise. Prepare for them ahead of time. Start building up an emergency fund and paying down your debt. You’ll have less to stress about when you have more money to put towards an emergency. Try it out: Going cold turkey with anything can be tough, including drastically going from two incomes to one. Give a try first. Live off the income of the spouse who will be working, and bank the income of the other spouse. Evaluate the trial period. Did you run into some problems? Did you forget you can no longer indulge in all the things you wanted to at first? Assess the situation and make sure it’s for you.

When you make the decision to live off one income, it’s a lot easier to adjust than if you were thrown into the situation against your will. Taking these steps and precautions will help you ease into the change, and plan for things that may catch you off guard later on.