Home Budgeting How To Live On One Income

How To Live On One Income

written by Shelley Marsh 23/04/2015
Living On One Income

We have spent big chunks of the last four years since our daughter was born living on one income.  Some of it was voluntarily, like the twelve months maternity leave I took after she was born.  Some of it was involuntary, like the two redundancies that followed soon after that: one for me, then once I got a part time job; one for my hubby!  Go figure!  I joke that we are not meant to have two incomes in our household, or so it seems!  Living on one income can be tough.  Really hard given the cost of living in Australia is so high and the cost of housing, well don’t get me started on that one.  However, living on one income can be done, and here are some tips to help you through.

Check out what Centrelink benefits you qualify for

Going from two incomes to one income, could mean that you might qualify for more assistance from the government than you could access previously. When my husband was made redundant and with me only working three days a week, we all of a sudden qualified for the Family Tax benefit A & B and the Childcare benefit (the means tested one).  Check out the Centrelink payment finder here, which will give you some guidance as to what centrelink payments you might qualify for.  Getting these extra payments have definitely helped.

Create a budget

If you haven’t done one, click here and see how to. Making one income stretch further is a lot easier if you use a budget.  Some people see a budget as something terrible, akin to a diet.  I prefer to think of it as a spending plan, making sure each dollar goes to our highest priorities and makes sure we get the best value for every dollar we spend.  I use the awesome free budget planner from the MoneySmart website.  Click here to check it out.

Check your spending leaks

Checking your spending leaks can also help you identify places where you can easily save money. All you have to do is to think of two things that you spend money on regularly, be it daily, weekly or monthly.  It could be a daily takeaway coffee, or weekly takeaway or monthly magazine subscriptions.  Next add up how much one of these things cost you over a month, then a year.  Now, think about how you could do that spending differently – be it bringing your lunch to work or cutting down from a large coffee to a smaller one, or buying from a cheaper supplier.  Remember, doing things differently does not have to mean that you cut things out entirely, unless you are highly motivated to do so!!  🙂 See how much this new way of doing things would cost you over a month and then a year.  Now, all you have to do is look at the difference between the two figures, how much it cost you per year using your old way versus the cost of the new way.  This is how much you could save by changing your spending behavior.  In my case I calculated I could save $2,184 simply by bringing my lunch to work and making my own hot chocolate in the office.  A huge figure, especially given I only work 3 days per week!

Meal Plan

Before the hubster was made redundant I used to meal plan for the week. So sit down usually on a Saturday and figure out everything we needed for a week of meals, create a list and purchase it all on the Sunday.  It was fab because I knew what we were having on each day and already had the ingredients ready to roll.  It prevented any random trips to the shops where I might bring home a few extras, shall we say.  At the moment our system is a bit out of whack.  My hubby does the meal plans for the 3 days I am at work (I don’t want to get in the way of him making dinner :-)) and I do the rest.  It still works fine and overall substantially cuts our food bill by at a guess at least 20%.

Compare, compare, compare….

On all your major expenses do a ring around or use online comparison sites to make sure you are getting the best deal. From your insurance to your telephone bill and everything in between make sure that you have got the best service to meet the needs of your family at the best available price.  I try to do the ring around once a year on all my services to make sure I am getting the best deal, and it can really make a big difference to your budget.  For example, by changing electricity provider I have saved $400 off my winter electricity bill, absolutely worth the two hours of leg-work it took for me to figure it all out.

Living on one income is difficult but it is achievable.  I hope my tips will make it easier for you and your family.

What are your tips for living on a single income?

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Disclaimer:

The information contained in this post is general in nature and does not constitute financial advice. Please see your financial advisor for advice specific to your individual circumstances

 

 

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15 comments

Sheridan Anne 24/04/2015 at 4:18 am

Fabulous post! Living on one income scares me to bits and is part of what’s holding me back from expanding the family so I’ll have to pin this and go through it with the hubby 😉

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Vicki @ Knocked Up and Abroad 24/04/2015 at 8:09 am

You need to be so vigilant and active don’t you to stay on top with just one income. I recently noted everything that we spent within a month and there were a lot of expenditure leaks. It was a great way to see where we spend most of our money and what were we can tighten up. From that I should be writing a budget, but I am yet to…..

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Mumma McD 24/04/2015 at 8:58 am

We have ‘spending leaks’ all over the place! My husband and I seem to spend as much as we earn, whatever that may be. When we were on one income we survived, just, but now that we’re both working we’re still only just surviving. I really need to work out a budget and stick to it!

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Amy @ HandbagMafia 24/04/2015 at 9:04 am

Great tips here. I hope I won’t need them but still doesn’t hurt to apply to even a dual income family.

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Shelley Marsh 26/04/2015 at 8:41 pm

Hi Amy, yes I think something like spending leaks applies to everyone. It is amazing how those small things add up!

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Vanessa 24/04/2015 at 9:59 am

I’m scraping by right now – we’ve pretty much always been one income like you by the sounds of it, but I had to swap jobs and going from one full time to one casual is not nice right now!
The little bit of extra time is nice though, and today I finally got the idea that ties a book together that I’ve been wanting to self publish for ages, so maybe every little bit will help.

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Shelley Marsh 26/04/2015 at 8:41 pm

Hi Vanessa, I am looking forward to hearing more about your book! That sounds soooo exciting!! I am hoping you will write a blog post about it or the process of self publishing?

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Malinda @mybrownpaperpackages 24/04/2015 at 12:23 pm

Excellent tips, whether you are on one income or not, everyone can use these.

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Shelley Marsh 26/04/2015 at 8:39 pm

Thanks Malinda!

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Toni @ Finding Myself Young 24/04/2015 at 1:52 pm

We’ve been on one income for almost 2 years now and we’re doing a lot better than I thought. I meal plan and always shop around for prices before I buy big purchases (and I also do it for nappies!). We’ve managed to renovate our bathroom from our savings and still have a bit left over which is good because I’d rather stay home for the next few years while our daughter is young.

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Shelley Marsh 26/04/2015 at 8:39 pm

Hi Toni, sounds like you guys are doing great, well done!!! And who wouldn’t want to stay home with your gorgeous girl – she is such a cutie!!

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Caroline Raj 24/04/2015 at 9:06 pm

We have just gone down to one income and thank you for these tips as my maternity leave has just finished and you are totally onto it with those spending leaks. Need to plug them fast! The meal planning is a great idea. Quite organised for a person like me but would make things easier and cheaper – thank you!

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Shelley Marsh 26/04/2015 at 8:38 pm

Hi Caroline, yes I am a huge fan of the meal plan, not only does it save you money but you don’t have to think when you walk in the door from work!

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Rosie 26/04/2015 at 1:20 am

What if you are already doing these things on two small incomes and it goes down to one? Our family has been scraping by for years but it has just got too hard. Especially when you include all the hoop jumping involved with casual and part time work, centrelink obligations and intermittent hours of childcare. It has gotten to an irreversible point for us and our kids where I have left the country for work abroad as there are more opportunities. My husband is still at home looking after our three children. Making your own lunch is brilliant but it doesn’t help all that much if you do this already. Do you have any other suggestions?

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Shelley Marsh 26/04/2015 at 8:36 pm

Hi Rosie, you guys sound like you guys know your finances and your costs inside out but maybe you could see a financial counsellor to see if there are any things that they can suggest to help you out. Financial counsellors are completely free and there will be one in your local area. They should be able to give you some specific ideas that are tailored to your families needs. I would definitely give one a try. Here is a post I wrote on what they do http://moneymummy.com.au/financial-help-free/ You have my greatest admiration as being away from your family must be very difficult. Best wishes Shelley

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