There are many reasons why families live on one income,
including a new baby, being a single parent, one partner losing their
job or perhaps by choice, when one of you decides to be a homemaker and
spend more time with your children. Whatever your situation is, living
on one income is often hard and may mean that you will have to look
carefully at home to reduce your spending by making a few clever budget
changes.
First, work out your cash flow:
First, it is absolutely essential to look at your
cash flow: that is, what money is coming in and what money is going out.
List every penny of income you receive on a regular basis every month.
Then list everything that you are committed to spending on every month,
including your mortgage, car payments, loans, utility bills like
electricity, cable and water. This list should include everything that
you absolutely must pay for every month.
Now add a realistic amount for food and other essentials such as diapers
for your little ones, toiletries, medicine, stationery and so on. These
are your essential monthly costs.
Then simply take away your monthly costs from your monthly income. The
difference between these two amounts is you disposable cash - or how
much you have to spend on everything else.
Of course this amount might actually be negative and
if this is the case for your family, you should do some serious family
budget work to get the situation under control before you consider
giving up one income and making the situation worse.
Next, look at where you can reduce costs:
There are many ways to reduce your costs. The amount you are aiming for
may seem unobtainable, but if you can reduce your spend by a dollar here
and five dollars there, the figures will soon add up!
First, go through your list of monthly bills and see
how you can reduce each one. Quite often you can call credit card
companies and get a reduced rate. You may be able to switch cell phone
providers or find a lower rate.
Many people don’t take advantage of offers that come through the door
for cheaper monthly cable or a lower monthly telephone service. Also,
one of the easiest fixed costs that you can lower is insurance. Call all
the car or home insurance companies and get them to beat each others
offers. As long as you are realistically lowering your monthly costs
then you are going in the right direction.
Then take a look at your existing credit. If you have good credit then
you are in a good position to shop around for a better rate car loan or
a better mortgage. If you’re credit isn’t great then log onto the three
credit companies, Equifax, Experian, and TransUnion. These will give you
practical information on how to fix your credit so that you can get
those monthly costs down by either consolidating your debts or replacing
them with loans over a longer lending period or with a better interest.
Again, be careful you don’t end up paying more.
Then have a look at all the things that can buy cheaper, like cheaper
gas, cheaper brands of food. There are lots of ways to spend less on the
things you buy on a regular basis by either finding sales, coupons or
special offers or buying it somewhere else where it’s cheaper.
Then comes the part where you have to look at all the things you can cut
out of your budget all together. Do you have any monthly subscriptions
or memberships that you don’t really use anymore? Do you spend money on
services or products that you don’t really use any more? Do you really
need those expensive brands?
Once you have sorted all your costs you should see if your monthly
costs, both essential and non-essential, are lower than your
potential monthly income. If it is, then great! Pat yourself on the back
for a job well done.
If it isn’t, and you have really tried to squeeze every last dollar out
of the costs, then you may have to reconsider your situation. You could
either start cutting things out of the budget - perhaps by using only
one car, one cell phone, and so on - or you could try to increase your
family's income by finding a better paid job or working from home in the
evenings.
Either way, try and be creative in thinking about the ways you could
save money so that living on one income is a comfortable step and not a
financial nightmare. With a little thought and planning ahead you may be
able to get by easier than you think.
Trick or Treating - Keep
Your Kids Safe Halloween is a holiday loved by kids everywhere. It’s a fun time
to dress up like silly or scary characters and go trick-or-treating in the
neighborhood. Be sure your kids are safe while trick-or-treating with these
quick tips..
