How You Can Afford to Live on ONE Income Comfortably

In today’s crazy world, living on one income comfortably seems like an impossible dream for many couples. Some people want to leave their jobs and live on one income so they can be a full-time stay at home parent to prepare for a new baby, or to care for their young kids, or to pursue a dream.

Many want to adopt a simpler and less stressful lifestyle without having to worry about money, but can’t afford to do so. The daily grind of being a two-career family with kids can be exhausting, stressful, and expensive.

Many families with young children would prefer living on one income so they can spend more time with their children while saving money on daycare and daily commutes. But it’s difficult for many parents to figure out how to give up the security of multiple paychecks.

Cutting out a source of income entirely could put the family well below the expected minimum for the local area. So, it’s not going to be that easy for everyone. But with some careful planning, creative budgeting, and adjustments, living on one income comfortably is not a far-fetched dream but more attainable than you might think.

In this post, I’m going to show you how you can afford to live on one income comfortably and enjoy your life.

My Story

We are a one income family for many years now. I had left my job to raise my children and never went back to work. My older one is 14, and the younger one is 7. While we do live on a tight budget, we don’t feel much deprived. We have everything we need and many things we want, and we do splurge occasionally, and save for our future religiously. All from that one decent income of my husband we are living on.

We own our modest home, our two cars are paid off, we are saving for the college for both of our kids, putting money towards our retirement, not as much as we would like to, but still saving. We take at least one nice vacation each year, and we regularly contribute to some charitable causes for the pleasure of our Lord. All from that one decent income we have!

So, I know that if you set your heart on it, you can also afford to live on one income. Your dream of making the transition from multiple paychecks to living on a single income can come true. How? Be prepared to embrace frugal living, think creatively, and be open to living humbly — with a bit less convenience than when you had two incomes.

I’m going to share with you some of the things we did (and still doing) that enabled us to live comfortably on one income.

If you are ready for your family to go from two breadwinners down to one, so one of you can take good care of your kids, manage more of the family obligations, or even go back to school to pursue a dream, and still enjoy some financial flexibility, these tips can help and make that transition easy.

Pay off your debt first

It’s really hard to live on one income if you have a lot of debt and you are making big payments each month. High-interest debt on a credit card, car, or student loan can be a budget breaker — and often makes living off one income impractical.

Even if you are not paying any interest on any of your debts, still try to pay down all your debts before you take the leap of living on one income. Be aggressive in doing so, and it will help you pay off early and save money for your next goal.

Related post: 13 Smart Habits of Debt-free People You Should Adopt

Have an emergency fund

Living on one income doesn’t mean you have to live from hand to mouth or paycheck to paycheck. Having a healthy emergency fund can help reduce your that anxiety significantly. It can also help protect you from unforeseen expenses such as sudden medical costs, or an unexpected home or car repair, or may be a job loss or layoff of your working spouse.

Ideally in the current reality, your fund should contain enough money to cover at least three to six months of living expenses by the time you drop to a single income. The more, the better. To get there, once you are done with your debt, set up a direct deposit to allocate a good portion of your paychecks into your savings account and the rest to your checking account. This can help you reach your savings goal faster and is a good first step toward learning how to control and manage your expenses so you can live on less money or 50% of your current income.

Downsize or refinance your current mortgage to save money

Housing usually accounts for the highest portion of any couple’s budget. Consider downsizing your current home or moving to a less expensive neighborhood or to a home that is energy-efficient.

Refinancing the house at a better and lower rate is also a good option for many. That could save you a significant amount of money each month.

Related post: 9 Ways Downsizing Your Home Will Improve Your Life

Try to get by with one car

When you are a two-career household, that often means two commutes — and, in most American cities, that means owning two cars. When you are living on one income, it’s harder to afford two car payments with insurance premiums unless they are already paid off.

Depending on which area or city you live in, selling one vehicle could be a good option for many. It will need some adjustments, but once you are settled in your new life, you won’t miss much. So be prepared to make some sacrifice here.

Cut back on excess

It’s not always about making more money; sometimes, it’s about learning where to reduce your expenses. Now that you have an idea what your new monthly income will be, it’s time to take a careful look in to your family’s expenses, and cut back on things that you really don’t need. Print a list of all your monthly expenses, circle everything you can do without, and start cutting.

A good start could be getting rid of expensive cable line, house phone, opting for a cheaper cell-phone service, and saving money by preparing meals at home instead of dining out frequently.

Now that you or your spouse will be staying at home, cooking and preparing meals every day at home will not be a problem. Having an advance weekly meal planning will also help reduce your grocery cost and stress. You will know exactly what to buy, because you will know exactly what you will eat.

Related post: Best Frugal Living Tips to Save a Lot of Money

Adjust your tax withholding

This is one area that often gets overlooked by many. Look at your income tax withholding to see if it can be adjusted given your current smaller annual income. You may be able to increase your take-home pay, which means you will have less money withheld from your paycheck each month.

If you go from a two income household down to one, your tax bracket is also going to decrease. You may need to increase exemptions, giving you extra money each pay period.

Spend your time, not money

Now that money is tight, and your family won’t have as much money moving forward, there will be more time to devote to activities with your kids, develop a new hobby, or do some home improvements. Cultivate hobbies that won’t cost you a lot of money or any money at all.

Take time to deliberately enjoy all the simple pleasures of your life. They are the things that often occupy the biggest part of your heart. Spend time with your family doing things that won’t need you to spend money. There are plenty of things that you can do to entertain yourselves without spending a tiny fortune each month. Also, take advantage of your local public library for free books and movies. Focus on creating memories and cherish your new found togetherness.

Related post: 11 Simple Things You Can Do Today to Enjoy Life More

Don’t even try to keep up with the Joneses

Keeping up with the Joneses is never a good idea for anyone. But now that you are living on less money, it is wiser to live within your means and be content with what you have. Remember that just because someone appears to have it all, doesn’t always mean they are able to afford it. If you could peer inside the Joneses’ homes and bank accounts, you might not always get an enviable picture.

Do what gives you long term pleasures and what is right for your family. While making financial decisions, you have to do what is right for you and not be influenced by the many temptations that surround us. Don’t make your life harder trying to impress others whose approval or envy doesn’t matter at all. Make the best of your situation, and focus on what truly matters.

Try to increase your household income

To live comfortably on one income, you can try to find a better job that will pay you more money for your service. By switching job, you can ask for a higher starting salary. This is a great way to increase your current household income without sacrificing much.

If your working spouse/partner can switch his/her current job for a bigger take-home pay, your household monthly income will increase by couple of hundreds of dollars. Sometimes, that raise could be equivalent to another part-time salary.

While employees who stick at the same company for a long time can generally expect a 3% annual raise, changing jobs to other companies can generally get you a 10% to 20% increase in your salary, when the economy is strong.

Final Thoughts

It’s possible to live on one income comfortably without living paycheck to paycheck. All it needs is careful planning, budgeting, and living within your means. You also need to be intentional about it and embrace simple living.

You may not have everything you want in life, but consider yourself blessed enough if you have all that you need. Learn to practice gratitude for the little pleasures of life, and you will feel happier. Understand that a simple fulfilling life is built on thousands of humble decisions that no one will ever get to know but you.

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