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

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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Published on November 20, 2018

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The truth is, there are many “money saving guides” online, but most don’t cover the root issue for not saving.

Once I’d discovered a few key factors that allowed me to save 10k in one year, I realized why most articles couldn’t help me. The problem is that even with the right strategies you can still fail to save money. You need to have the right systems in place and the right mindset.

In this guide, I’ll cover the best ways to save money — practical yet powerful steps you can take to start saving more. It won’t be easy but with hard work, I’m confident you’ll be able to save more money–even if you’re an impulsive spender.

Why Your Past Prevents You from Saving Money

Are you constantly thinking about your financial mistakes?

If so, these thoughts are holding you back from saving.

I get it, you wish you could go back in time to avoid your financial downfalls. But dwelling over your past will only rob you from your future. Instead, reflect on your mistakes and ask yourself what lessons you can learn from them.

It wasn’t easy for me to accept that I had accumulated thousands of dollars in credit card debt. Once I did, I started heading in the right direction. Embrace your past failures and use them as an opportunity to set new financial goals.

For example, after accepting that you’re thousands of dollars in debt create a plan to be debt free in a year or two. This way when you’ll be at peace even when you get negative thoughts about your finances. Now you can focus more time on saving and less on your past financial mistakes.

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How to Effortlessly Track Your Spending

Stop manually tracking your spending.

Leverage powerful analytic tools such as Personal Capital and these money management apps to do the work for you. This tool has worked for me and has kept me motivated to why I’m saving in the first place. Once you login to your Personal Capital dashboard, you’re able to view your net worth.

When I’d first signed up with Personal Capital, I had a negative net worth, but this motivated me to save more. With this tool, you can also view your spending patterns, expenses, and how much money you’re saving.

Use your net worth as your north star to saving more. Whenever you experience financial setbacks, view how far you’ve come along. Saving money is only half the battle, being consistent is the other half.

The Truth on Why You Keep Failing

Saving money isn’t sexy. If it was, wouldn’t everyone be doing it?

Some people are natural savers, but most are impulsive spenders. Instead of denying that you’re an impulsive spender, embrace it.

Don’t try to save 60 to 70% of your income if this means you’ll live a miserable life. Saving money isn’t a race but a marathon. You’re saving for retirement and for large purchases.

If you’re currently having a hard time saving, start spending more money on nice things. This may sound counterintuitive but hear me out. Wouldn’t it be better to save $200 each month for 12 months instead of $500 for 3 months?

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Most people run into trouble because they create budgets that set them up for failure. This system won’t work for those who are frugal, but chances are they don’t need help saving. This system is for those who can’t save money and need to be rewarded for their hard work.

Only because you’re buying nice things doesn’t mean that you’ll save less. Here are some rules you should have in place:

  1. Save more than 50% of your available money (after expenses)
  2. Only buy nice things after saving
  3. Automate your savings with automatic bank transfers

These are the same rules that helped me save thousands each year while buying the latest iPhone. Focus only on items that are important to you. Remember, you can afford anything but not everything.

How to Foolproof Yourself out of Debt

Personal finance is a game. On one end, you’re earning money; and on the to other, you’re saving. But what ends up counting in the end isn’t how much you earn but how much you save. Research shows that about 60% of Americans spend more than they save.[1]

So how can you separate yourself from the 60%?

By not accumulating more debt. This way you’ll have more money to save and avoid having more financial obligations. A great way to stop accumulating debt is using cash to pay for all your transactions.

This will be challenging, depending on how reliant you are with your credit card, but it’s worth the effort. Not only will you stop accruing debt, but you’ll also be more conscious with what you buy.

For example, you’ll think twice about purchasing a new $200 headphone despite having the cash to buy them. According to a poll conducted by The CreditCards.com, 5 out of 6 Americans are impulsive spenders.[2]

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Telling yourself that you’ll have the discipline to not buy things won’t cut it. This is equal to having junk food in your fridge while trying to eat healthy–it’s only a matter of time before you slip. By using cash to make your purchases, you’ll spend less and save more.

A Proven Formula to Skyrocket Your Savings

Having proven systems in place to help you save more is important, but they’re not the best way to save money.

You can search for dozens of ways to save money, but there’ll always be a limit. Instead of spending the majority of your effort saving, look for ways to increase your income. The truth is that once you have the right systems in place, saving is easy.

What’s challenging is earning more money. There are many routes you can take to achieve this. For example, you can work long and hard at your current job to earn a raise. But there’s one problem–you’re depending on someone else to give you a raise.

Your company will have to have the budget, and you’ll have to know how to toot your own horn to get this raise. This isn’t to say that earning a raise is impossible, but things are better when you’re in control right? That’s why building a side-hustle is the best way to increase your income.

Think of your side-hustle as a part-time job doing something you enjoy. You can sell items on eBay for a profit, or design websites for small businesses. Building a side-hustle will be on the hardest things you’ll do, be too stubborn to quit.

During the early stages, you won’t be making money and that’s okay. Since you already have a source of income, you won’t be dependent on your side-hustle to pay for your expenses. Depending on how much time you invest in your side-hustle, it can one day replace your current income.

Whatever route you take, focus more on earning and save as much as possible. You have more control than you give yourself credit for.

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Transform Yourself into a Saving Money Machine

Saving money isn’t complicated but it’s one of the hardest things you’ll do.

By learning from your mistakes and rewarding yourself after saving you’ll save more. What would you do with an extra $200 or $500 each month? To some, this is life-changing money that can improve the quality of their lives.

The truth is saving money is an art. Save too much and you’ll quit, but save too little and you’ll pay for the consequences in the future. Saving money takes effort and having the right systems in place.

Imagine if you’d started saving an extra $100 this next month? Or, saved $20K in one year? Although it’s hard to imagine, this can be your reality if you follow the principles covered in this guide.

Take a moment to brainstorm which goals you’d be able to reach if you had extra money each month. Use these goals as motivation to help you stay on track on your journey to saving more. If I was able to save thousands of dollars with little guidance, imagine what you’ll be able to do.

What are you waiting for? Go and start saving money, the sky is your limit.

Featured photo credit: rawpixel via unsplash.com

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