A few decades ago, single-income households were the norm. Dad worked and Mom stayed home with the kids. Eventually, as more women demanded equal roles in society, moms started going back to work rather than staying home with their kids. Lifestyles rose up to meet the new, higher incomes, and now 57 percent of two-parent households have both parents working – some by choice and some by necessity.
1. Plan ahead
The easiest way to live on one income is to plan for it from the very beginning – when you buy your first home. If you buy a home that you can afford on just one income, you’ll have a head start. Even better, arrange all of your expenses around one income. Don’t rack up more credit card debt or buy more cars than you can afford. Not only will that help you build up savings (with that second income that’s going unused), it will give you a realistic preview of how tight things would be if you really had only one income.
2. Get real
Living on one income shouldn’t be too challenging if you arranged your finances from the beginning. But, let’s face it: not everyone does that. People change their minds. So, what do you do if you later decide that you would like one of you to stay home with your kids?
If you made big purchases – like a house or a car – based on two incomes, you won’t be able to go to one income without making some major changes. One option would be downsizing your home. Other ideas would be to concentrate on paying off debt – car loans, student loans, and credit cards – while you’re both still working. Cutting out things like your daily latte from Starbucks will certainly help, but you’ll have to make some big hits, too.
3. Make concrete plans for the money you’ll save by not working
While most people focus on the income they’ll be giving up, it’s important to realize that working costs money, too. Childcare, transportation, clothing, more meals out, and even taxes, add up fast. It’s important to plan for what you’ll do with that money; otherwise, you’ll see it as “extra” and fritter it away rather than putting it to good use.
4. Assess your commitment
This is the part where you give up those Starbucks lattes. And the movie channels on your cable. And buying your groceries only from high-end organic stores. And signing up for every “Mommy and Me” class that’s available. Maybe even a second car. For most families, living on one income is tough. And it all comes down to commitment. Unless you’re in the 1%, you can’t have it both ways: transitioning to one income without giving anything up. You won’t make it if you aren’t willing to sacrifice, and that means both partners, not just one.
Today’s culture of materialism and iEverything isn’t set up for raising a family on one income. But that doesn’t mean it’s impossible, just that it’s hard. With foresight and commitment, you’ll be just fine.