Supporting a Family on a Single Income
by CashTime Loan Centers
Most of us think it’s impossible for a family in America today to live on just one income nowadays. With 60% of families having two incomes, meaning both mom and dad work outside the home, that notion is understandable. Looking back just a few decades to 1960, however, the financial landscape was vastly different with 70% of families in America living on only one income, usually the father’s, while mom stayed home working to raise the family and maintain the household. You might think that kind of living is long gone, along with other things from the 1960’s like pedal pushers and penny loafers, but just like vinyl records are making a comeback, so is learning to live on a single income.
Here are some tips from families who are making it work on one income, and enjoying life while they save for the future:
1. Become convinced of the benefits. If you’re not convinced of the benefits of living on one income, whether that means one parent gets to stay home with the kids, or a second income is dedicated wholly to paying down debt, building savings, or investing in your future, you won’t stay the course to financial freedom.
2. Prioritize savings and investments first. Instead of budgeting for essentials and saving what’s left, some families living on one income put savings and investments first, and what’s left after those are taken care of is what they have to spend on other things that month. This sets up what the author of The Millionaire Next Door calls an “artificial environment of economic scarcity.” In other words, if you don’t have money in your checking account, you can’t spend it. By prioritizing debt paydown, savings and investments, these families are forced to learn how to live on what’s left, while building towards a financially secure future.
3. Downsize and Minimize. Take a cue from becomingminimalist.com, and be content to live with less stuff while you work for your future, not for more things. Fight the urge to compulsively consume, and decide to be happy with a smaller home, older car, and fewer clothes in your closet. The tiny home movement is a prime example of both younger couples who want to avoid mortgage debt and older people who want to simplify their lives by living with less stuff. Whether you’re just starting out, have kids, or are an empty nester, tiny home living could mean huge monetary savings. With a mindset that this will work and isn’t just an experiment, you’re starting off on the right mental foot. For more information on how to live rich with less stuff, check out this series of previous posts.
4. Find frugal fun. Just because you’re downsizing your spending habits does not mean you’re not allowed to have fun anymore. You just might need to rethink what “vacation” means to you. Instead of spending thousands of dollars on a trip to Disney with the family, why not book a week at a campground instead? Don’t have a camper? Talk to a friend about borrowing theirs or check out a local rental. National parks are a great way to see the beauty America has to offer, spend time outdoors, enjoy bonding over things like fishing, swimming, rock collecting, nature walks, s’mores by the campfire, and nights under the stars. Leave the video gaming console and kids’ cell phones at home and spend time with your family. These times can not only save you money but also become some of the best childhood memories your kids ever have.
5. Shop around. For everything. Make it a challenge to see who can find the best bargain on car insurance, cell phone plans, groceries, clothing (if you must), health insurance, gas, and everything else. Buy secondhand if you absolutely must purchase clothing or furniture but aim to put off these purchases until your financial goals are reached, if possible.
You might think these tips came from small families with large incomes, people who make more money than they really need to live on, or families who have help from others. That is not the case. We gathered the above tips on how to live on one income from regular families with modest incomes, one of which has 11 children! One family consists of a working mom and a stay at home dad. Another family lives well on a public school teacher’s income. Living on one income is totally doable in today’s world.
If you think June Cleaver was the last mom who was able to stay home and raise her children, we can tell you she was not. The road to financial freedom may require a change in lifestyle, a reorganization of priorities, and perhaps some sacrifice, but the families who are doing it will tell you if you really want to live well on one income, it can be done.
Finally, you simply cannot care what other people think. No matter what people say, you must be convinced of the validity of your path, committed to achieving your goals, and determined to see it through. Whether you rent an apartment, buy a tiny home, or decide owning a traditional home is in line with your goals, where you live and how you live only has to make sense to you. When you retire 20 years before your peers and have the freedom and finances to travel the world or spend your time any way you see fit, it will make sense to everyone else.