Is your goal to live on one income so you or your spouse can be a stay-at-home parent, pursue schooling, keep house, or another establish another endeavor? Take the following steps to make sure that you are well prepared for your lifestyle change.
Get a New Attitude
If you are currently living on two incomes, you may need to make some changes, both drastic and non-drastic in order to make the one income work for your family. Embrace money-saving ideas, such as shopping at yard sales or thrift stores, cooking at home, and bargain hunting. Look at these practices as new adventures not deprivation. You can have just as much fun, or maybe more, at a free outdoor summer concert as you can at the movie theater, where it will cost you and average $10 per person without snacks.
Many things that we think are necessary (such as that new smart phone or 300 cable channels) can easily be lived without. It is all a matter of establishing your priorities and what is most important to you.
Deciding to stay home can be a scary time financially, but you can quickly learn how to drastically reduce the grocery bill, get tons of free baby clothes and more. It can be a lot of fun trying to figure out more ways to save. There is always a new idea out there to explore.
Establish a Budget
Before you go to one income, establish a household budget. Make it simple so you don’t get overwhelmed. You will have to track your spending, so keep receipts whenever you buy anything.
Make sure each dollar is accounted for. While this doesn’t seem like much fun, you do get used to it. In fact, working toward a shared goal, such as a budget can actually strengthen a relationship!
Start living on the one income months before you drop the second income. This will not only get you used to the idea of living on less, but you can put the extra money into savings and build up an emergency fund at the same time.
Pay Off Debt
If you have any debt, with the exception of your home, work toward paying it down or eliminating it completely. Getting rid of a car payment or credit card debt will put you in a better place financially. Start with the smallest debt, using the snowball method. This will keep your motivated while you make progress with eliminating debt. Each debt that gets knocked out means less interest you are paying and more money available each month.
Consider reading a book or taking a class about debt management, such as Dave Ramsey’s Financial Freedom, to learn more.
Earn a Bit Extra
Even with one main income, the family can bring in additional income in small ways that won’t interfere with parenting or other goals. Many single income families supplement that income through holding a yard sale, babysitting, cooking extra meals, selling crafts, blogging, tutoring, and more. Find what works for you and take the opportunity to bring in a bit extra money if doing so fits in with your family.