5 Tips for Families Living on a Single Income
Living on just one income isn’t an ideal option for most families today. The expenses of running a household, and looking after children is just getting more significant, and you can’t always get a bonus at work when you need it most.
However, there are many good sides to living on a single income for families too. Usually, it means that you won’t have to pay through-the-roof prices for a nanny or care provider to come and look after your kids while you and your partner are at work. Whether you’re living on a single income now, or you’re just looking into your options, here are some tips to help you out.
1. Track your Expenses
It’s crucial to keep track of your incoming and outgoing expenses if you want to be financially secure. This tip applies to all families, whether you’re living on a single income or not. Without knowing exactly how much money you have coming in, and what you’re spending each month, it’s hard to know where you can cut down on your costs.
You can either use an old notebook, a piece of paper, an online tool, or an app to make a list of all the expenses that you have to deal with each month. Remember to consider everything, including how much you pay for your monthly loan repayments, how much you spend on tax and insurance and unusual expenses that only happen a couple of times a year.
2. Set some Goals
Once you understand what’s going on with your monthly income, you can start to make some plans on what you want to accomplish financially in the long-term. You might decide that you want to save up for a house for you and your family. On the other hand, you might want to pay for a vacation with the kids. Whatever your goal is, it will help you to stay on track when you’re planning on ignoring your budget so you can order an extra takeaway or eat some fast food.
Remember, you can have a combination of long-term goals and short-term goals to keep yourself focused if that works better for you.
3. Use Credit Cards and Loans Carefully
A lot of people assume that they have to give up on loans and credit cards completely if they want to be financially secure. However, the truth is that you may still need to borrow money. Telling yourself that you can’t get help when you’re in a tough financial situation won’t help you much. Instead, you need to think carefully about how you can reduce your chances of any long-term problems with your loans and cards.
For instance, look for a card that gives you a low-interest rate and plenty of rewards. Additionally, make sure that you’re only borrowing money when you have a plan in your budget for paying it back.
4. Cut Your Expenses Wherever You Can
As well as looking for places where you can borrow money, it’s also worth examining options where you might be able to cut down on the amount you spend. You’d be surprised where you might be able to find places to reduce your costs. For instance, you could look into carpooling with friends to work so that you don’t need to spend so much on filling up the tank. Another option is to pack your own food and drinks to take with you to work, so you don’t have to spend a fortune on eating out for lunch.
Since one parent will be staying at home with the kids, you should also be saving cash on childcare. You could even look into setting up a babysitting service to help you earn a little bit of extra cash on the side.
5. Invest your Money
Finally, when you’re trying to manage a family and make ends meet on a single income, it can seem as though you couldn’t possibly find cash for investing too. However, even putting a little bit of money away at a time could help you in the long-term. Investing money is how you make sure that you’re making the most out of your wealth so that you can take advantage of things like extra retirement savings and money for college or university later on.
If possible, speak to a financial expert about your investment opportunities before you get started. They should be able to give you an insight into how you can manage your cash to take on the least amount of risk and hopefully, earn the best rewards.