Strategies for Living on One Income

No matter the reason, going from a dual-income family to living on a single income can be tough. You may be focused on the cost of living, ways to save money and your financial situation more than ever. While a change in lifestyle like this can be stressful, there are strategies that can help make the adjustment easier.

Tips for Making One Income Work

Here are some tips to successfully manage the transition to one income for you and your household:

• Update your budget. Compare your monthly bills and living expenses with your new income situation. Now may be the time to adopt more frugal habits. Lower or eliminate costs, such as unused subscriptions or gym memberships.
• Make savings work for you. Commuting and childcare costs may not be what they were if one partner is now home. Put any savings from situations like that in an interest-bearing savings account or use the extra money to pay down debt.
• Reduce monthly bill amounts. Explore ways to cut back on monthly loan payments by refinancing your mortgage, auto loan or student loan at a lower interest rate.
• Look into unemployment benefits. If you or your partner lost your job due to layoffs, you may be eligible for unemployment. You can start the process by filing a claim with your state’s unemployment insurance program.
• Pay down debt. Keep up your credit card and other personal debt payments—even if you’re only able to make the minimum payment. If you have a lot of credit card debt, consider transferring your balance to a card with a lower interest rate.
• Seek out low-cost activities. Forgo dining out, expensive concerts or costly sporting events to curtail your expenses. Try free or lower-cost alternatives instead. Entertain yourself and your loved ones with family walks, board games and movie nights from your favorite streaming service.
• Plan meals to cut food costs. You could spend less money at the grocery store if you go in with a list tied to specific dinners you plan to serve all week. Plus, you’ll save by avoiding the takeout window if you have a game plan for eating at home.
• Tap into your emergency fund. If you have money set aside for a rainy day, withdrawing from it now could ease the financial burden while you transition to living on one income. Then, once your finances improve and you get the knack of budgeting with one income, you can begin rebuilding your emergency savings.
• Look for ways to earn extra money. From part-time work to a side hustle, there are ways someone without a full-time job can contribute to the household income. Turn hobbies into side jobs or explore other options to bring in additional income.