It's a fact that either by choice or necessity, an increasing number of households are getting by on one income. The difficult job market has played a role, as has the fact that many people are single parents. Some families simply prefer one parent to stay at home with the children.
SEE: Budgeting When You're Broke
Surviving on only one income certainly has its challenges. However, with a little forethought and planning, you can not only do it, but you can do it well. Here are several tips to ease your burden.
Create a Detailed Budget
Creating and following a family budget is generally a good idea, but it's vital if you're living on one income. The key is to determine exactly how much you're spending, where you're spending and to compare that to how much income you're earning.
To do this, collect all of your bank account and credit card statements for the past few months. Organize all expenses into various categories, such as food, gas, utilities and cash withdrawals. Once you see where your money goes, it's much easier to identify expenses you can eliminate or reduce and to set target amounts to spend in each category.
Slash Personal Spending
This strategy is simple: Identify each potential purchase as a "need" or a "want" before you pull out your wallet. Wants include items such as convenience store snacks and sodas, coffee, and dinner at a restaurant. Eliminate these wants as much as possible. Also, find ways to reduce the cost of needs. For example, you may be able to use a smartphone app like GasBuddy to find the cheapest gas in your area or clip coupons to save money on groceries.
SEE: Coupon Shopping: Clip Your Way To Savings
Save on Monthly Bills
Next, collect all of your bills from the previous month and search for ways to reduce them. Can you cut back on your cable TV package, reduce your cell phone minutes plan or get by with a lower connection speed for your Internet service? If so, call your provider and start trimming away.
To reduce your home energy bill, raise your thermostat by three degrees and run fans during the summer months. Also, only do full loads of laundry and dishes, and be vigilant about turning off lights and TVs that aren't in use. Simply adjusting your habits can save you hundreds of dollars annually.
Boost Individual Income
After you've identified how to save money, identify ways to boost your income. Can you ask for a raise or better position yourself for one in the near future? Alternatively, you may be able to make money in your spare time. For example, you can sell your unneeded items on eBay or Amazon, or start a side business.
SEE: How To Ask For A Pay Raise
The Bottom Line
One of the most difficult aspects of raising children while living on a single income isn't cutting out the things you want for yourself, it's having to tell your children they can't have the latest and greatest toys, gadgets or clothes. Remember, when you reduce your expenses, you're not necessarily reducing your quality of life. Even if they complain, the most important thing you can give your kids is your time and love. Does your family live on a single income? What adjustments have you made to ease the burden?
More From Investopedia
- How Women Can Improve Their Financial Standings
- 6 Tips On Selling Your Home In A Down Market
- Vacation Savings Tips