Many couples would like to manage on one salary. There are different reasons for this; wanting to raise children with one parent at home, one partner trying to start up a business or perhaps one partner has lost their job. Many of us were raised with one parent at home, available to help with homework, there to patch grazed knees or to soothe a sobbing child. Whatever the reasons for wanting to live, or indeed having to live on one salary, it is helpful if we can plan ahead for the eventuality.
How long do we need to prepare to live on one salary?
Assuming you are fortunate enough to have time to prepare for a one-income household instead of being thrown into it by circumstances you should take as much time as you can to save cash. Experts estimate that a year of saving cash should do it. Naturally, the more time you have to save the better. An emergency fund of six months to twelve months of living expenses is advisable. It would be smart to pay off as much debt as you can before scaling back to a one income household.
You can also try living on only one of your incomes to see if you can make ends meet. Use the other pay-cheque to pay off consumer debt and build an emergency cash fund.
Make a budget to help you manage your finances
If you are not in the habit of making a budget for your household and living expenses you will be amazed at how much money is wasted. Trim your spending down to necessities and priorities and try to live that way for at least six months. Ask yourself these questions;
- Can we trade our car in for a less expensive vehicle?
- Are we willing to downgrade our cable television package to something more basic?
- Can we live in relative comfort on one income, while still saving for retirement?
What if we don’t have time to prepare?
If you are in the unlucky position of losing one income suddenly and you don’t have time to prepare here, some tips from around the world on making it work:
Bike or run to work
In metropolitan areas, you can save on transport and health club fees by getting to the office on your own power. Many offices have showers and locker rooms, and it is also a good idea to ask if it’s possible to work from home. In cities like London, where a monthly Tube Travelcard costs at least £116.80, that can add up to a sizeable saving each month.
Consider combining households
In some cultures, the answer to the one-income question is moving in with your parents or your children. It is a fact that in many cultures this is not a popular option but perhaps it is time to rethink some of our ways in light of current financial difficulties worldwide.
Be mindful of where you live
Living in the centre of London will likely be more expensive than living on the outskirts. “A few kilometres in the right direction could save you cash and you could still be close to all the right amenities. Also ask yourself if you really need that spare room.
Find free entertainment
Money may be tight, but it is still important to have fun. There are many great museums, galleries and public events that are free to enjoy in most cities. You may be surprised how much you can do for free.
Buy second hand
Dress your children in designer clothes if you wish but buy them second-hand. You will be surprised at the quality of clothes you will find in second-hand shops and charity operated stores. Children generally wear clothes for a short period before they grow out of them and if the quality is good the clothes can be worn by many children. Second-hand toys are also an excellent option. Second-hand baby furniture is also a good way to save cash. Buying second-hand is also environmentally friendly. Consider buying online from websites such as eBay.
If you find the right second-hand shops you might also consider buying your own clothes “previously owned”. You can manage to look fashionable at a fraction of the cost of new clothes. Check your city or the internet for quality second-hand goods.
The right attitude
With a positive attitude saving money can be fun and rewarding. There are so many ways to save money from changing your eating habits to visiting the library or buying second-hand books instead of buying from expensive bookshops.