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!
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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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