For the past 5 years, my husband and I have been frugally living on one income. Though it started from necessity, it has become our preferred way of budgeting as a couple.
Living on one income in a two-income world isn’t easy, but it comes with a lot of perks.
By living off of one income, you have another whole paycheck left over to do amazing things with. You can create a large savings account, pay off debt, travel, and more. Budgeting for one income also allows for the other spouse to go back to school, meet family obligations, or become a stay at home parent.
Whether living frugally on one income for you is a choice, or necessary for your family, I’m here to help you find your roadmap to success.
5 Ways to Live Off One Income
Like I mentioned before, living off one income wasn’t exactly a choice at first. As a new military wife, I left my job with the County and moved all the way from the east coast to the west coast.
Moving almost 3,000 miles away gave me a little anxiety, everything was so different! Of course, I wanted to take some time to get used to the area before I started working.
These are the 5 major tips for living on one income that allowed us to still thrive :
1. Have An Emergency Fund
I’ve always been a frugal spender, so I had a sizable amount of money saved. This allowed us to have a safety cushion for our finances.
It’s recommended to have 3 to 6 months (possibly more) of your monthly expenses in savings. In case of an emergency while I wasn’t working, we’d be able to cover any costs without going into debt.
Learn how to start an emergency fund here.
2. Set A Budget
It’s important to create a plan for where your money will go when living frugally. Carelessly spending money is the easiest way to get into trouble.
You’ll need to get together with your spouse to figure out your income and needed expenses. Here’s a simple guide on how to create a budget to help you get started.
For some motivation, you can view my one-income family budget of $2,500 per month!
Once your budget is made, you may also need to reduce your expenses to make it work and live comfortably.
3. Cut Expenses
These are the major budget busters that we cut down on:
We scoured the internet to find an affordable apartment in a good area. We used all the different websites to find a rental and checked out several places.
Eventually, a good one was found using Craigslist. It was cheap, but also very small, which was fine for just the two of us.
Downsizing your home is a great way to save on housing expenses. Having less room also forced us to live a minimalist life, which also saved money.
Become A One Car Household
Can you get by with one car instead of having two car payments?
When we moved, I decided to leave my car behind. This means we only had one car payment, one insurance to pay, and one car to refuel; this significantly cut our monthly expenses.
While it can be a bit annoying to navigate, it was worth it. If I ever needed the car, I could easily drop him at work that day. Also, the rare occasions where I would need to take a ride-share somewhere were still less than the monthly costs of another car.
When looking for jobs, I searched for the ones that we could carpool, or that I could take the public transit, or walk to.
We made different changes around the apartment to lower our utility bills. For instance, we wore warmer clothes in the winter instead of turning on the heater.
In the summer, we would use fans and open the windows for a breeze. This doesn’t mean we didn’t use the AC or heater at all, but we were able to set them at more cost-saving temperatures.
For more ways to save, take a look at my other post on 40+ cheap living tips.
4. Reduce Your Debt
With only one source of income to depend on, it can be a struggle to cover all your expenses for the month.
While both partners are still working, try your best to reduce the amount of debt. Paying off just a few credit cards will reduce the financial burden and family’s stress over one income budgeting.
5. Embrace Frugality
Without working, you’ll have much more time on your hands. Embrace a frugal living by:
- Canceling housekeeping and gardening services.
- Making meals and packing lunches instead of eating out.
- Comparison shopping for better deals.
- Taking on DIY projects to cut costs.
- Learning to do simple car maintenance.
Benefits Of Living Frugally On One Income
Whether you’re living on one income and saving the other, or only one spouse works, there are great benefits to both ways of living.
1. Allows One Parent To Stay At Home
Many people would love to be a SAHM (Stay at home mom) or SAHD (Stay at home dad), I know that I would. It’s great to be able to spend more time with your children and watch them grow.
By only living off one income now, we’re preparing ourselves for an easier transition in the future when we have kids. I plan to also contribute to have more savings by doing different side hustles and maybe working from home or part-time.
Raising kids on one income may sound like it will be hard, but think of the money saved on daycare alone!
2. Save Money In Other Areas
- Commuting Expenses: Without having to go work every day, money can be saved on car expenses such as gas and the frequency of maintenance.
- Clothing Expenses: Suits and office clothes cost money. You can be at home in your pajamas all day since you no longer need work clothes.
- Home and Childcare: Life can be stressful when navigating working full-time and managing the home. With more free time, you’ll be able to take care of things around the home without hiring out services. Being at home also has the benefit of reduced childcare costs.
- Eating Out Less: With only one spouse working, the other has more time to make meals at home. This cuts down on the amount of time money is spent eating out from being too tired to cook. Extras can also be packed to take to lunch for work and reduce that expense as well. Check out these meals that will make 6 servings for less than $10.
3. Pay Off Debt Faster
With only one income needed for your day to day expenses, you can free up the other paycheck if both parties are working.
Think about it… What if both you and your spouse made $50,000 per year? If you lived on only 50k, you would have another 50k to pay off any debt you have.
Even if you just do this temporarily, it’s a fast way to quickly pay off any loans and be on your way to financial freedom.
Here are more ways to pay off debt fast.
4. Increase Savings
With more money available, you can maximize your savings in a variety of ways.
- Emergency Account: It’s a great feeling to not have to worry about how you’ll survive when an emergency occurs. If my car breaks down or the AC goes out in the middle of summer, I know I’ll be able to afford it.
- Home Down Payment: Ever since I was young, I knew I wanted to own a home one day. Living on one income can allow you to save more money for the down payment on your mortgage. The less money you have to borrow, the less interest you’ll pay. Depending on how much you save, you could also fully pay for a home without borrowing as well.
- Retirement Savings: In these times, many have to keep working to afford to live. The average retirement age is 63! Secure your retirement by saving from now. If you put enough aside, you could even retire early!
- College Savings Fund: Student loans are one of the top reasons people are in debt. You can help your child(ren) with these costs by saving for their future.
- Leisure Savings Account: I love to enjoy life and have new adventures, especially traveling around the world. In one year, we took 4 vacations: 2 within the U.S. and 2 outside of it: Paris and Italy. Saving a percentage of our income has allowed us to not just “work till we die” but to go out and enjoy life as well.
5. Financial Security
By practicing frugal living on one income, we have also prevented future stressors in our lives. If one spouse loses their job or has to deal with medical issues, the family does not have to struggle during that time.
Also, as a military spouse, it can be hard to get a job. With the constant moving around, there is no long-term job security. Hiring managers see you as a risk when you might have to quit at any given moment and it can take months to get a good position within a company. I’ve even resorted to applying for jobs I’m overqualified for and could not get an offer.
By only budgeting on one income, we’ve prevented having to struggle in between jobs when we PCS (move).
If you want to live on one income, it can be done with careful money management and a few sacrifices. With your goals constantly in mind, work together as a family to make it happen.
Frequently Asked Questions
According to an article on CNBC, anywhere from about $54k in Mississippi to $88k in New York. The amount needed depends on where you live and the cost of living in that area. However, costs can still be greatly reduced based on how you budget and manage your money.
People can live on one income by budgeting and reducing monthly expenses (downsizing, couponing, monitoring utilities, etc).
Living on one income in a two-income world certainly has its benefits and disadvantages. Are you currently living on or trying to live on one income? Feel free to share your experience or any tips below.