How To Plan To Live On One Income

Are You Ready

Although it was last May that I dropped to part-time employment, it was a year ago in March that we started living as if we had only one income.

Although it’s not always something you can plan for, if your goal is to have one spouse manage the home and/or kids full time, there are a few things you can start doing now to ensure you can make that happen.

  1. Pay down debt.

If you have student loans, car loans, or credit card debt, you want to get rid of that as soon as possible, preferably before you leave full-time work. Debt payoff gets a lot harder once your income shrinks. While we have never had credit card debt in our marriage, we did have the last $5000 of a student loan for me and we bought a brand new minivan in January of 2014. The money we were paying for three kids in day care and towards degree #3 hampered those payoffs, but we still put everything we could towards those loans. We paid off that student loan last March, and paid off the van the day after my last full-time day in May, 16 months after buying that van!

2. Make sure you have a cushion.

Car repairs, broken appliances, and medical bills are inevitable. Saving for an emergency fund will be easier before you leave your job. We had about 6 months expenses in savings before I left.

3. Cut back on expenses now.

Cutting expenses now will help you make the best use of those full-time dollars so you can start your new role debt-free and with that important cushion. You don’t have to go to extremes to make this happen (unless, of course, you want to make it happen even faster). There are abundant entertainment alternatives to cable, cheaper cell phone plans, frugal fitness,  cloth diapers, frugal travel, and most of us probably eat out more than necessary. I found that once I was home, I had more time to research and plan frugal alternatives that I avoided when time was short with our busy two-income lifestyle.

4. Start living on one income.

This was crucial to our plan. If we couldn’t make it on one salary while we had extra money coming in, how could we possibly do it when crunch time came? For two months before I submitted my resignation, we lived within my husband’s salary and banked the part of my income that was not used for day care. Not only did this prove to us that it could be done, but it helped knock out that last loan just in time for me to leave my job. If you can’t survive on one salary, you may not be ready for the real deal.

5. Be ready to track every penny.

We have no wiggle room for mindless spending, especially since we are paying cash for my graduate school. I use an Excel spreadsheet to track what I spend- and pull myself into line if I am getting off track- but there are many other budget tracking alternatives out there. Whatever you use, it doesn’t work if you don’t use it. Find something and stick with it.

Are you a single income family? What do you do to stay within your means?

 

 

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2 thoughts on “How To Plan To Live On One Income

  • We’ve always been a single income family, even the 5 years my husband spent in graduate school and made a salary just a hair above the poverty line. He was fortunate to have tuition reimbursement on top of having a RA position. We also lived in student family housing at a very accommodating major university… everything was subsidized and I did my part to keep us afloat (too much to be said here on that!). My husband was a good student and was awarded a $25k fellowship while finishing up his dissertation. Upon finishing his PhD we had tens of thousands of our own money and were gifted a downpayment for our first house.

    The house was the mistake. My husband became an assistant professor at Michigan State, but hated it…. so we were pouring in money to fix up a lovely older home in a town we disliked and a position he loathed. Otherwise I kinda kept my thrifty ways… we found furniture on Craig’s List, IKEA and the front curb! We would have survived.. things would have improved, but we moved away just short of 2 years later, having not saved anything, but no worse for the wear…

    My husband’s income doubled when we moved out west. Housing prices tripled. It took a year to mentally adjust to prices. I tried going back to school (thought about nursing!) and did very well, but the closer I got to the program application deadline the more I realized it would require a LOT of time… more than what I was willing to give. My husband is in a position where he’s not going to be of much additional support. To heck with it…

    I started a small dog walking/pet sitting business instead.

    I consider myself to be a SAHM, and dog walking is the side gig. It doesn’t give us much extra, but right now it’s paying about $250 a week.. and that’s the same grocery and outings budget we had when my husband was in grad school. My goal is now to always save at least 50% of my husband’ income. We have a lot of catching up to do in comparison to other people our age and with a similar income, but I think we’re doing well..

    I do all the things you do. It’s why I like your blog so much…. you do all the same little tweaks and tricks.. we’re not vegetarian, but rely on a lot of plant-based proteins… I plan EVERYTHING… always looking at adding opportunity…

    In our case it’s not enough to get by on a single income. We live in an expensive city. We have to be able to get by on an income that I could get, which is, sadly, not remotely close to my husband’s. That’s the main reason we are paying off the house soon. We are trying to drive our fixed expenses low enough so that we can afford them on an income that is half or less of our current income. I don’t think there will ever come a time where I could sustain us long term (without some sort of life insurance) , but that would be the goal however unreachable.

    • I think if we were in a HCOL area, we would be in the same boat. My casual net income (after taxes and sitter) can vary between $500 and $1300/month). It’s just enough to buy groceries, pay for preschool and dance class, gas for me, internet, and a wee entertainment budget. If we didn’t live in Ohio, it would be a lot more rough. I’m not sure how long it will take to get an online teaching job, and I hope my publication history will make me more attractive for such jobs, but I don’t think they pay will be super high- maybe $800-1500/month. If I add it to my current job, it will be a nice little amount for extra mortgage payments though. And once my 2 year old is in 1st grade, there will be no more child care costs or preschool payments, so that will add hundreds to the kitty every month too. I think saving 50% of your husband’s income is still WAY better than the average family.

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