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10 Tips On How To Live Well Even With Only One Income

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10 Tips On How To Live Well Even With Only One Income

In an age of so many dual-income families, is it really possible to live well on just one income?

Absolutely! Trust me, I know. We are a family of six, living on one income–a military income. After I enlisted in the military, we decided it would be best for my wife to stay home with the kids; that’s when we made the transition. Now we are happily a single-income family. I’m going to show you how we do it, and how you can too.

Why one income?

Families go to one income for all kinds of reasons. You may want one of you to stay home with the kids. You may have calculated the cost and realized it cost almost as much as one of your incomes in daycare and travel expenses for both of you to work. You may want to live a more minimalist lifestyle and focus less on earning more money. Or you may not be a single-income family by choice. One of you could have been laid off, but the good news is that you can live well on one income–it could have been a blessing in disguise.

No matter your reason, here’s how to make it work:

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1. Stick to the plan

Planning is everything. You can live on almost any income if you budget and make a plan for every dollar. And it can become fun to see how far you can stretch it. So what does this mean?

  • Set a budget. Yes, you need a budget. If you have one, stick to it. If you don’t have one, it starts simply by tracking your purchases for a month, then setting each category. See where you can cut back. If you’ve recently became a single-income household, you may notice that you’re spending much less.
  • Plan your meals. Meal planning is huge. You should know exactly what you’re going to buy when you walk into the grocery store, and you should know exactly what you’re going to make out of it. It’s surprising how much food we all have in our homes that we don’t eat because we don’t have a plan for it.
  • Plan your vacations. If you go on an annual vacation, you have an entire year to save for it. Figure out how much you’ll need ahead of time, and divide it by 12 months to get a monthly amount to save. Vacations don’t have to cost a lot; our family usually spends less than $500 on each vacation we take.

You’ve heard “if you fail to plan, you plan to fail” and this couldn’t be more true in your finances. You’ll be amazed at what you can afford if you plan. Joshua Becker says, when it comes to purchases, “ask when and why, not if”. Even on one income there doesn’t have to be trade-offs, but it is all about timing and planning.

2. Spend based on priorities

Are you trying to keep up with the Joneses? You shouldn’t be, because the Joneses are broke. Don’t make purchases to impress others, make purchases based on your priorities.

If you truly value family above materialism, do your purchases reflect that?

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This is an important question for all of us to ask occasionally. It’s easy to get caught up in the consumerist mindset of earning more and spending more to be happy, but that’s a lie. Rich people aren’t any happier than the rest of us. There’s nothing wrong with having more money, but make sure your spending is lining up with your priorities. Just spend an extra few seconds thinking about each purchase to decide if you really need it. You’ll be surprised how often you don’t.

3. Cut the cable

Speaking of priorities, where is TV on that list? We cut the cable over five years ago and haven’t looked back since. We spend more quality time together as a family. We spend more time reading, which has led to much financial success (finance books are my favorite). There are a thousand reasons to cut the cable, and I have yet to find one good reason to keep it. If you must watch TV, consider Netflix or keep some DVDs around.

4. Move…or don’t

If you’re new to the single-income life, you may be ready for a downsize. We usually don’t need as much house as we think we do; however, you’ll want to calculate the cost first.  Moving isn’t cheap, so it needs to be financially worth it to really make the leap. That being said, if you’re living above your means, consider moving into a more affordable house. It doesn’t have to be permanent.

5. Learn to barter

What are you good at? Landscaping? Cleaning? Home repairs? That’s as good as cash. Reach out to your friends and neighbors, and figure out where you can trade your services. Bartering is the ultimate win-win scenario. This works especially well for babysitting, whether you need a babysitter for a date night or for running errands–find someone to swap with. You both get free childcare, and you both get more done.

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6. Use your resources

There are resources in your city, you just have to find them. It could be a local food bank that is looking for volunteers, and, in exchange, you take some food home. Or you could be in a place where you just need to go to the food bank and get some food. There’s no shame in that; that’s what they’re for. From food banks to food co-ops to clipping coupons, know your resources and use them. The more resourceful you become, the more you will be able to live well on one income.

7. Dump your debt

If you’re new to the single-income lifestyle, you may be wondering how you can get debt-free on less money than you were making before. Dumping your debt doesn’t have to cost more money. That’s right, there are ways to make an impact without spending more. For starters, you can call and negotiate with your credit card companies to lower your interest rates and possibly even your balance.

If you’re serious about paying off your debt, and you don’t plan on going further into debt, consider a balance transfer to lower your interest rate. You must be serious about not incurring anymore debt or this just provides a way for you to go into more debt. But if you really are done with being in debt, a balance transfer can help. For example, if you can pay off your debt in 15 months, the Chase Slate offers 0% interest rate for balance transfers for the first 15 months, with no transfer fee. But you need to be sure you can pay it off in 15 months or the interest rate will go back up to the standard rate.

8. Prepare for emergencies

Emergency funds are a better option than a credit card when disaster strikes. Even if you can only save $50 each month, start putting something away in a savings or money-market account for unexpected expenses. Ideally you’ll want three to six months of living expenses, but $1,000 is a good starting place. Of course, $500 is better than nothing. The idea is to have some funds to dip into in the event of an emergency so that you don’t get into a worse financial spot by taking out a loan or using a card.

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9. Sell a car

Do you have more than one car? Do you need more than one car? Maybe you do, but maybe you haven’t really thought about it. You may have needed two vehicles when both of you worked, but it could make sense to sell one now, especially if you have a car payment. Dave Ramsey always jokes that his show should be called the “Sell the Car Show”, because of how often that’s the most appropriate solution.

10. Save for big purchases

If you have to finance it, you can’t afford it. Instead of taking out a loan for a car or other big purchase, why not make interest-free payments into a savings account right now? Think of it like a layaway plan; you’re saving until you have the full amount. Then you can make the debt-free purchase. If this doesn’t seem possible for some things, you may be living above your means. The bottom line is that credit card and loan interest will destroy your finances. Anything you can do to avoid interest will set you up for success.

Featured photo credit: Crowd of People Crossing an Old Prague Road/Viktor Hanacek via picjumbo.com

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Kalen Bruce

Military, Writer

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Last Updated on July 20, 2021

Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

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Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

Have you ever considered your life now, and how it would be if you had more time to spend with your family and less worries about money?

Nowadays, financial stress is one of the most troublesome weights in life. If you’ve ever encountered financial stress, you know the difficulty of not having enough income to pay your obligations or bills.

Many people say that money is not the ultimate goal of life. While that’s true, money certainly plays a very significant role. The meaning of financial freedom changes with the different phases of our life, but ultimately, it is something that many people strive for.

In this article, we’ll explain how to capture that financial freedom you’ve been looking for. Read on to learn the secrets to financial freedom.

Break Free of Your Finances

Financial freedom is about having a constant flow of cash from your assets to cover all your regular needs.

When you are not worried about your income, or living paycheck to paycheck, you gain a great sense of freedom. It’s the freedom to be obtain and do what you truly need to make your way through everyday life.

Gaining financial freedom, though, is a process of growth, making small improvements and gaining emotional strength.

Though it seems hard to believe, it is really very simple to get financial freedom.

To do so, you simply need to make sure that your assets exceed your liabilities. In other words, you’ll need to find the sweet-spot where your residuals meet or surpass your expenses. This is something that you can achieve with the proper plan.

While not every person will accomplish financial freedom, the potential for anyone to do so is certainly there. Anyone can achieve this success, regardless of their income level.

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Outlined below are 9 secrets that will help you in your goals of achieving financial freedom.

1. Stop Unnecessary Spending

We often spend money inwardly, instead of objectively.

For example, you may spend when you’re anxious, depressed, restless, exhausted, from fear of missing out, or to please others. This is a very unhealthy way to handle your finances.

To stop this habitual spending, log down all your spending over the course of a month.

Just as some people keep a food diary, keep an expense diary. Remember not to just write down how much and what you spent the money on, also include the circumstances of why you spent the money. Was it an impulse buy at the checkout line or was it something you planned to purchase?

This increased self-awareness could enable you to avoid triggering situations in the future when you are considering an impulse buy.

2. Plan a Monthly Budget

This is a great opportunity to get serious.

Take a seat with your spouse or partner and make a monthly budget based on your income, not your expenses. You are never again going to spend more cash then you have on hand.

Overspending is the thing that led you to more financial obligations. Make sure you decide every month what is coming in and what will be going out and stick to that budget… no matter what.

3. Cut-up Credit Cards

Perhaps you are the type of person who always pays your credit card balance in full before the end of your billing cycle, and enjoys the reward points you gain. If this is the case, then you’re already way ahead of the game.

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If not, you may want to consider ridding your life of the burden that credit cards bring.

Many cards have strategies set up so that if you make a certain number of late payments, they will raise your interest rate much higher. This can really add up in the long run and you won’t be doing your financial situation any favors. If you’re prone to late payments or have a large balance due on your cards, cut them up!

Without proper self control on credit card spending and payments, you are basically throwing your money away. To ensure that you have better control over your spending, use only cash or debit for all future purchases (and don’t forget to pay at least your minimum payment on your cut-up cards each month!).

4. Increase Savings

There is no doubt that for a comfortable retirement you must accumulate satisfactory savings throughout your working life.

It’s good practice to save up to 15% of your income.

Start with your workplace 401(k), if you have one. If not, a Roth IRA (if you are eligible) or a traditional IRA (if you are not eligible for the Roth) are the next logical steps.

Increase in longevity means you might be able to look forward to 25 to 30 years in retirement, or possibly even significantly more. Investing now in good retirement plans will ensure that you have a guaranteed a stable monthly income when the time comes to stop working. [1]

5. Invest Wisely

Consider investing in funds.

Specifically, you will gain higher returns if you invest in different types of mutual funds such as Debt funds, Equity funds and Hybrid funds with a proper balance, although it absolutely relies on your personal preferences and sense of risk taking.

To get the most of these benefits, make sure you are investing in a variety of assets. Another resource of investing in mutual funds is SIP (Systematic Investment Plan) where you invest some money every month in funds. SIP works by averaging the per unit price of the stock.

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Mutual fund investors are aware of the benefits of an SIP (Systematic Investment Plan). For one, it is the most secure way to invest in equity mutual plans so that wealth is created over a long period of time. This plan also helps you to gain a better sense of financial discipline, which will come in handy in all your financial endeavors.

6. Invest in Gold

There isn’t really a better way to invest in gold than to have the physical gold itself in your possession.

You can purchase gold coins and bars from mints as well as from coin dealers and other private sellers.

Another way to invest in gold is through ETFs (Exchange Traded Funds).

These are is similar to mutual funds but they are exclusively investments of gold. ETFs are great because they offer more liquidity; the ETF owns the actual physical gold, stores it, and retains the value of the shares. These shares can then be bought and sold in the stock market, and one big benefit is that the transaction costs of gold ETFs are much lower than the that of physical gold.

With its consistently-increasing demand, investment in gold can be very wise long-term investment to make.

7. Stash Emergency Funds

Whether it’s a cash gift or a work bonus, always try to save any extra money that comes your way rather than making unneeded purchases.

If you get paid every other week, you’ll get an “extra” paycheck (three rather than the usual two) twice a year. Either save those paychecks towards your emergency funds or utilize the money to pay down other obligations, such as loans, credit cards or other debts.

Make it hard to get your cash.

Put your savings in an alternate bank, maybe an online bank that forces you to delay for several business days before transferred money hits your regular bank account.

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8. Find Fabulous Mentors

Find a mentor, such as a friend or family member, who has exceptional control over their finances and pay attention to everything they do.

If you do not have any friends or family that are enjoying financial freedom, then find a mentor online! There are numerous blogs and guru websites featuring the advice of many people who have reached financial freedom, and they exist primarily to let you in on how to achieve it for yourself.

There are also plentiful forums available that share tips and tricks on how to best achieve financial freedom. Read as much as you can and start changing your habits for the better.

9. Be Extra Patient

Patience is the key of financial success.

Being patient can be quite tough, especially when you’re struggling with your finances, but having faith is worth it. You’ll continuously be on the right track if you are taking the proper steps above.

So don’t be discouraged, even if you are only saving a few dollars a month; it all adds up. Within just a few years you’ll look back proudly at your accomplishments and be glad that you had the patience to get there.

Financial Freedom for All

Anyone can achieve financial freedom, regardless of their financial circumstance.

Use the tips provided above to get yourself on the track to financial freedom and toss your monetary concerns out the window. If you wish to achieve a life with financial freedom for yourself and your family then you must adopt a disciplined approach towards your finances.

Following the simple secrets above is a great start to making your money work for you, so you can work less and live more!

Featured photo credit: rawpixel via unsplash.com

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Reference

[1] Hartford Gold Group: IRA Retirement Accounts

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