Home > 2016 > Personal Finance

10 Tips for Parents Hoping to Live on a Single Income

Advertiser Disclosure Comments 0 Comments

In some marriages, one spouse dreams of staying home while the other works. That’s particularly true of parents with young children.

Living on one income is undoubtedly a challenge, but certainly not an unattainable fantasy — even if you don’t make six figures or more.

Here are 10 tips to make a one-income life work for your family.

1. Have a Heart-to-Heart With Your Spouse

Get on the same page as your spouse. Dropping to a single income is a major change that requires lifestyle adjustments by both of you. Overspending can quickly lead to money troubles and resentment that could irreparably damage your relationship.

2. Create a Budget Based on One Income

Draw up a new budget that assumes one of you is no longer in the workforce. These are a few of the expenses you may be able to cut completely.

  • Child care
  • Gas/public transportation expenses related to your commute
  • Clothes for work
  • Lunches and breakfasts on-the-go
  • Mobile phone for work

Then there are other line items that you can probably reduce. Maybe you can stretch the time between haircuts now that you’re not in an office every day. Or you may have fewer takeout dinners because you’re home to cook.

Some people suggest taking this new budget for a trial run before you actually quit your job, but that many not be practical for some families. Until you actually leave the workforce, you’re going to need to pay for child care and other work-related expenses.

3. Cut the Fat in the Budget

Now that you have a one-income budget in front of you, what does it look like? Are your expenses far beyond the money your spouse brings in each month? Don’t despair. We’re just getting started here.

Take a second pass on the budget and see where else you can trim. Consider the following.

  • Eliminating cable television
  • Switching to a cheaper cell phone package
  • Shopping around for better rates on insurance
  • Refinancing your home to bring down the monthly payment
  • Packing lunches for your spouse
  • Finding cheaper date-night activities

Look at every line item with your spouse and ask: Do we need this and, if so, is there a way to pay less for it?

4. Drop Your Debt

Perhaps the best way to free up a lot of money in your budget is to get out of debt. If you weren’t making a $300 car payment or sending $200 to credit card companies every month, wouldn’t it be easier to get by on one income? Think about how you can pay off that debt ASAP. Whether it’s student loan debt or credit card debt, falling behind on payments can affect your credit score. Read this guide to find out how to improve your credit score and then keep an eye on how the changes you’re making may be helping your score by viewing an overview of your free credit report, updated monthly, on Credit.com.

5. Consider Becoming a One-Car Family

Dropping to one car can help you reduce debt and save money. This requires a serious lifestyle change for many families, but it can be worth it.

Getting rid of a car often means:

  • Dropping a car payment
  • Reducing your insurance premium
  • Reducing the amount of gas you buy
  • Cutting back on opportunities to shop and spend without planning

This strategy can be extreme, but I have friends who make it work. It’s easiest if you live in an area where you can walk to a friend’s house or a local park. It would also work well if you live in an area with good public transportation.

Think twice if you live in a rural area. It’s not good to feel isolated and overwhelmed from being stuck at home all day.

6. Decide Whether to Downsize Your Home

Take careful stock of your current home and future plans. If you have empty rooms and aren’t planning to have more kids, then maybe selling your home and getting a smaller place is a smart choice. Not only can you end up with a lower mortgage payment, but your utility bills and property tax assessments might shrink too.

7. Sell What You Can to Create a Cushion

Chances are, you have plenty of stuff in your house you can sell. Doing so gives you a nice cushion in your bank account before leaving your job. No matter how well you think through your budget, something could throw you for a loop.

Your emergency fund is going to smooth out any wrinkles in your budget. So sell your old, unwanted stuff for top dollar and bank the cash.

8. Review Your Insurance Options

What types of insurance does your family get through your employer? How can you replace those policies?

It’s vitally important to avoid gaps in crucial coverage. For health insurance, the federal law COBRA may let you continue your health insurance after you leave work, but the price can be astronomical.

Other options include signing up for coverage through your spouse’s workplace benefits plan or buying medical insurance on a government exchange.

9. Get Creative When it Comes to Family Fun

Finding cheap entertainment is another secret to successfully living on one income — no more heading to the mall for no particular reason on a Saturday afternoon. You may also have to skip Disney in favor of day trips closer to home.

10. Look Into Other Employment Options

Even after you’ve gone through all the steps above, you may find the budget is still too tight to make one-income living work comfortably for your family. In that case, don’t assume that staying home with your kids means you have to forgo earning money completely.

Depending on your circumstances, you may be able to work out a telecommuting arrangement with your current boss that allows you to work from home part-time. Another option would be to find a work-at-home job or use one of these odd and unusual ways to make extra cash.

Finally, don’t overlook other employment opportunities for your spouse. Maybe he or she could find a different job or apply for a promotion that will give your family the money you need to stay home.

More From Money Talks News:

Image: Ocskaymark

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team