Living on One Income
I recently saw a clip on The Today Show with tips for women leaving their jobs, or thinking about leaving their jobs, to become stay-at-home moms. That got me thinking about the prospect of trying to live on one income and seeing how the tips could apply to the general population.
Some of the tips that were provided are listed below along with my take on how they apply to a two income family trying to live on one income. If you were to try living on one income for a while, it’s important to remember where to cut back and where not to.
Use a Budget – This is already a critical item for everyone’s financial well-being, but it becomes even more important when trying to live on one income. Without careful management and oversight of where your money goes, you may find yourself getting behind. For a really simple budgeting method, see my recent 60% Solution post.
Keep Separate Accounts – For two-income families, there’s really no need to have separate checking accounts. Just make sure that you and your spouse find some common ground on the amount of money you’re each allowed to spend on non-essential items.
Continue Retirement Savings – Just like having a budget, saving for retirement is something you should be doing in nearly every circumstance. Don’t allow changes in income to short-change your retirement. This is one area where you can really benefit by trying to live off of one income. Your retirement savings is a great place to apply the extra money that you’re not spending.
Stay Connected – Continue your involvement in professional affiliations, social groups, and volunteer opportunities. These activities keep you well balanced and build your social network.
Even if your family doesn’t quite make it to living on one income, living on one and a half incomes will free up a lot of money. That extra money can be used to boost your savings, investments, retirements account, or your Lending Club P2P loan portfolio. When you stop to consider that there are millions of families living on one income, you begin to realize that your family might be able to do it as well.