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Living on One Income Can Be Done with the Proper Planning. Here Are Some Tips.

For various reasons, married couples with children consider, at one time or another, living on one income so that one of them can stay home. In this economy, and with the cost of living these days, this is no easy proposition. However, if this is something you are thinking about, here are some ideas on how to achieve that goal.

Adjust Down Work Expenses for Nonworking Spouse

The first thing you need to do is review your budget (or make one if you don't have one). In doing so, be sure to include non-recurring expenses like clothing, car insurance, fuel for an oil or propane heater, that aren't paid every month. Take a 12-month average of an annual figure. Then look at those expenses that could be eliminated if one of you stayed home, such as daycare, and those that would be reduced, such as gasoline for commuting, food (no lunches out), dress clothes, and the like. Your auto insurance premium may also go down since one of the cars will not be driven as much. This can make a difference if you are eliminating a long commute each day. Finally, talk to a tax professional on whether the elimination of one income will put you in a lower tax bracket, thus increasing the net income of the spouse that is still working. Then compare your projected single-source income to this expense total to see if it will cover anything.

Reduce Other Expenses to Come Within Income

Second, if the single income is not enough, see if there are expense categories that can be reduced to bring things in line with income. You might be able to share one vehicle and save on insurance and maintenance, and perhaps a loan payment. You could prune away some premium channels from your cable bill, get a cheaper cell phone plan, or cancel a newspaper. Also, talk with any family and friends that are already living on one income to see what ideas they may have that would help you.

Do A Test Run Before Jumping In

Third, do a test run. Try living off one paycheck for awhile and put the other one in a savings account. Use that savings to pay down other bills like credit card balances or to create an emergency fund. There is risk in living on one income, so be sure to include contributions to a savings account should anything happen to the breadwinner, such as job loss, disability, or illness.

Options If the Test Run Fails

If the test run does not work out, try looking into part time employment with a job that has work hours for times the spouse with the full time job is at home. This helps with raising the children, but does mean less time with each other. You could also look for employment where you could telecommute, which might be a good combination of benefits. Many companies are going with this as technology improves and as the costs of maintaining office space go up.

Parents want to be able to watch their children grow up and build the lasting memories. This can be a tough, but not impossible, goal to achieve. However, it is worth looking into if you are willing to take the risks and make the necessary sacrifices.


Steven J. Richardson
Bankruptcy, Collections, Student Loan, DUI and Traffic Court attorney in Woodbury, NJ.