The best Guide to Living on One Income and Saving the Other

Living on one income is difficult. Have you ever felt trapped by your circumstances? Do you ever want to skip or take a day off from work but can’t because it would result in missing a paycheck? Do you aspire to go back to school to advance your knowledge but can’t possibly afford the cost?

Living on one income while trying to support others can be difficult, but it is doable. Here are a few questions you should ask yourself about how to live on one income in a tight budget. How long will I need to live off of one income? Do I have an emergency fund already set aside? What is the cost of living in my state?

These essential questions can help you determine whether or not you are in a position to live on one income. This transition could be quite easy or much more challenging depending on your circumstances. Cutting out a source of income entirely could place you below the poverty line for your area. This is not something you would want to get used to. Here are a few tips to help you survive to live on a single income, as living on one income doesn’t have to mean living hand-to-mouth.

Have an Emergency Fund

You need to create an emergency fund for life’s emergencies, such as a child falling ill, a car accident, plumbing repairs, and more. The budget on depositing a designated monthly amount into your emergency account to keep it growing. In the case of an emergency or unexpected expense, you can rely on your emergency savings without much financial strain.

Maintaining a healthy emergency fund can help reduce the anxiety of living on one income. Ideally, your fund should have enough finances to cover six to nine months of living expenses by the time you drop to a single source of income. To achieve this target while you are both still working, set up your direct deposits to allocate a portion of your paychecks into the savings account. You may also have to make a hard decision regarding which extraneous expenses to cut out of your budget. Streamlining your budget will help you grow your emergency fund more quickly.

Reduce Housing Costs

It is everyone’s dream to live in a decent neighborhood with good schools, a clean environment, and nice shopping centers. If you cannot afford this dream, don’t overextend yourself financially. A large percentage of one’s income usually covers housing. However, it is not advisable to spend all of your income on housing costs, as you need money for your other bills and day-to-day expenses. Housing costs include rent and monthly utility bills, such as electricity and water. To save on some of these expenses, you can opt to live in houses where the electricity and water bills are included in the rent.

Try to live in a house where you can afford rent. Who wants to be locked out of their house because they couldn’t pay their rent on time? To avoid this embarrassing situation, make sure your rent is within your means. If you are living on one income as a result of losing a job or losing your partner due to separation or death, you will have to adjust to a new and unfamiliar way of living.

Adjusting might include moving to a smaller house, such as a townhome, or moving to another neighborhood. You might have to re-purpose parts of the smaller house, such as making the basement into a kid’s playroom or parent’s office. Check out some basement decoration ideas.

Another option to look into is refinancing your home. For some people, savings are significant. Don’t feel compelled to compete with friends or loved ones. Sacrificing in the short run could result in being able to afford higher rent in the near future.

Set a New Budget

Figuring out a new monthly budget can help you make the necessary adjustments. Factor out unnecessary expenses such as taxi fares. You can opt to use public transportation or even carpool to work. Bring lunch from home instead of buying from restaurants while at work. Dry cleaning and childcare expenses will also have to be reduced if you are to live on one income.

Pass up that regular, $4 coffee in the evening. Save that money instead, and, before you know it, you will have saved up around $120 by the end of one month. Save more and spend less. Factor in a savings plan into your budget. Additionally, continue saving for a long-term plan such as retirement. No one wants to be a burden to others later on in the future.

Go out and party less with friends. Start planning on eating homemade food rather than eating out at restaurants. Check this list of homemade foods in The Daily Meal. For ladies, cut down on your hairstyles; instead of four different styles in a month, consider just one or two. Learn to do cornrows or twist-outs at home, which are protective styles that last for quite a while.

Get out of Debt

Consider paying down your debts first. It’s never wise to carry high-interest credit card debt; a sudden drop in income could worsen the situation. Consider using your credit card as little as possible. You might want to leave your credit cards at home and only use them in case of emergencies. This habit of leaving your credit cards at home will help minimize unnecessary expenses. Most people are attracted to the lavish things in life, but if you don’t have enough money, you will be tempted to use your credit card instead. Pay your daily debts with cash or a debit card instead.

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Invest in a Physical Business Idea

After saving for some time while living on one income, you can venture into a business as a side hustle. The business doesn’t have to be large at the start; start small and grow with time. Consider starting a fast food joint or a hair salon, selling clothes online, offering computer services – anything simple that does not need a huge cash investment. Establishing a small business could lead to a comfortable life in the near future.

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Sell Items Online and Live on One Income

Who doesn’t have an Instagram, WhatsApp, or Facebook account? Social media is quickly growing, and it has enhanced many interactions. If you’re living on a single income and are looking for a way to increase your salary, selling items online is an excellent option. You can open an online business selling items such as cutlery, hair, sofas, etc. Use your social media platforms to market yourself. Create a website or page for selling your goods. This way, you will be able to reach a wider market, even customers overseas. Grow your online business with time.

Make use of your Hobbies and Talents

Everyone has a talent, even if most of us haven’t yet figured it out. Living on one income calls for wisdom. Some people are talented musicians, poets, spoken word artists, and dancers. How many television advertisements have you seen that are seeking people who can sing or dance? If you have the time to perform during events, you could be paid to entertain guests. Clubs often host karaoke every week; go to their events and sing your heart out. You might come out of there with a check to take home.

Let’s say your hobby is cooking. You can bake your friends’ cakes for their birthdays or events for a small fee. You can also cook during events. Offer your services for a fee. You will not only enjoy the extra income, but you will also be doing something that you like.

If you can also offer salon services such as hair braiding, manicures, and pedicures, do not hesitate to do so in your free time. Talents and hobbies can go a long way towards growing your monthly income.

Make Sacrifices

Sometimes you simply have to go without. Perhaps that means saying no to friends when they want you to go out to a club or casino. You might opt to participate in free activities or complete community service instead. Sacrifice some of your “wants” in order to make life better for your family. Sacrifice buying that expensive house or expensive car. By doing all of this, you will become a better person.

Become Self-sufficient

The idea of becoming self-sufficient is fascinating, but doing so does not happen overnight. It is a process of continuous learning, and it takes time. Some ways to become self-sufficient include growing your own groceries at home, learning to fix your minor car damage, such as fixing a tire, or learning to paint your house. Wallpapers are quite attractive, but they are also expensive. If you are not able to afford them because of a tight income, don’t worry. Try learning online on how to paint your house. It is not as difficult as it may seem. Learn to make homemade baby food recipes from Healthline. Instead of hiring an interior designer, use the Pinterest app to plan how to design and arrange your own house.

Shop Around

If you are living under one income plan, it will be necessary to avoid expensive shopping. Develop a tendency of buying cheap. If you were previously used to shopping designer goods, it is time now to try otherwise. You will have to curtail your Louis Vuitton, Versace, Gucci, Puma, or Fashion Nova tastes and adjust to non-designer brands. When shopping around, do not buy things at first sight. Remember that you are living solely on one income. Try walking around and seeing if you can find the same good elsewhere at a cheaper price and even better quality.

Downsize

Dispose of all the unnecessary things that you do not want. Sell the used clothes that you no longer need or wear. If you no longer use your cutlery and it is in good condition, you can sell that as well. A second car that you rarely used can also be put on sale. Sell your old sofas. If your house has extra space that you are not using, consider moving to a smaller and cheaper house. All of this will help to cut down on costs.

Spend Less than you Need on Everything

A useful way to plan your spending is to keep a list of everything that you need to buy. Plan on listing everything, such as food, toiletries, clothes, and day-to-day bills. Look for ways to cut down on the costs at hand. Writing down everything that you need to buy can help you consider whether each item is a necessary expense or if you can live without it. If it’s something that you can definitely do without, then you have no option than to cross it off the list.

If you are not sure how much less you should spend, consider what percentage your income has decreased by. For example, if your income was reduced by 30%, you will need to decrease your spending by a minimum of 30% on everything aside from debt payments.

This will likely be a tough adjustment, but the sooner you cut down your expenses and spending to be below your new income level, the less debt you will accumulate on credits.

Living under one income is generally not easy, but with the above tips, it is not impossible either. It typically entails making sacrifices to start, knowing that there is a light at the end of the tunnel no matter how long it takes to get there. Making the necessary adjustments in your life will play a key role in reaching the end goal. Make your life comfortable by only spending what you can afford. Don’t buy unnecessary goods, and learn to say no to your friends’ bad money influence.

Some debts such as mortgages, car loans, and student loans cannot be simply paid off. It takes time to finish paying them off, so don’t pressure yourself too much. You can decide to put extra money towards your monthly mortgage payment. This can shave years off of your mortgage payment.

Cut out Unnecessary Expenses

We all have unnecessary expenses that we end up regretting. To make your living comfortable without worrying too much about recklessly spending cash, cutting off expenses can be greatly helpful. How do you cut off the unnecessary expenses? It is actually easier than you can imagine.

 You can start by cooking more at home rather than eating out. And if you have to eat out you, choose inexpensive meals. Eat on a budget. If you are out with your friends, don’t pay the bill alone simply to be nice. Split the bill amongst yourselves. You can decide to have French fries and chicken instead of the pizza because that meal is cheaper. Prepackaged and fast foods put a huge dent in your wallet. If you have always dreamed of losing some weight, cutting out snacks and pricey processed foods is a healthy lifestyle to adopt.

You can eliminate services that you currently pay someone else to do for you and, instead, do them yourself. Eliminate manicure and pedicure costs and do them at home. Reconsider laundry, lawn mowing, and even dog walking services and complete these tasks yourself. Avoid expensive clothing and hairstyles for ladies. Go for the cheap but still classy clothes. There is no need for a chauffeur if you can drive yourself around. You didn’t need a housemaid if you don’t have kids. Complete house chores yourself, especially if you are living alone and hence only have a few duties to tend to in the house.

Depending on your situation, you might also need to cut out gym expenses and start working out at home. Eat healthily and go through this tutorial on how to work out from home. These processes can take months, so don’t wait to get started.

Get Rid of Depreciating Assets

A car is a depreciating asset. There is no need to have a fleet of cars that are surely not increasing in value. Living under one income requires wisdom. Sell the assets that you can do without. If you have five-car, you can sell three or four to minimize fuel expenses and maintenance costs. If that’s not possible, consider selling a gas guzzler and purchasing a used fuel-efficient vehicle.

Lower your insurance rates by increasing your deductible. Buy a used car rather than a new one. You can save a decent amount of money as well by buying from a private seller rather than a dealer. Dealers are paid on commission, so the higher the price of the car, the greater their commission. Have your car examined by a mechanic first. Should the car require minor repairs, negotiate with the seller to deduct the repair costs from the purchase price.

Try Living on one Income before Quitting

If one spouse wants to quit their job, try living on the income of the spouse who wants to remain employed. During that period, use the income of the spouse who hopes to leave their job to pay off debts and increase savings. This experiment will give you a good idea of what you need to do to successfully live on one income. You can make the necessary lifestyle adjustments then.

Spend Time and not Money

While your family won’t have as much money moving forward, you will have more time to devote to activities with your kids, a new hobby, or home improvements. Instead of hiring housekeepers, you will now be able to spend more time with your family. If you previously relied often on takeout for dinner because no one had time to cook, that may no longer be necessary. Take advantage of this increase in your free time.

Do Online Jobs

The world is growing drastically. There are many technological advancements and numerous job opportunities online. Living on a single income can be challenging, so look for alternative ways to earn money online. You might only have to spend eight hours working every day. Some online jobs to consider are online writing, programming, taking surveys, forex trading, and bitcoin mining. All of these options will leave you with extra cash. Some online jobs can actually bring in more income than your current job. Here Dollar Sprout has come up with some great flexible online job ideas.

Additionally, online jobs can be done from the comfort of your home, a convenient option that eliminates commute times and even worries about what to wear at work. All you need to be successful in an online job is dedication and concentration.