Believe it or not, it is possible for a couple to live on the earnings of only one income. Doing so is not as difficult as you think. Below are some tips and some information to help you decide if one income is right for you.
Prepare in advance if possible
You should try to be prepared for having to live on just one income. Set aside an emergency fund and only use it for emergencies, and craving pizza is not an emergency. Think and research how you can cover the cost of appropriate life or disability insurance, and if required health insurance for the whole family. Try to prepare for these changes yourself, using the internet and free literature from your local library. If you have the resources and need a little extra advice consider a financial advisor, but they can be quite expensive and usually make commission on products they sell you.
Be aware of the stark fact that working costs money
Yes, you make money by doing it, but you’re not netting as much as you think you are. There are travel costs (commute, bus, matatus), lunch costs, that cup of coffee on your way to work every morning, and maybe even childcare. There are a number of different statistics, but working can cost you up to 30 percent of your wage just to go to work, and definitely more if you need childcare.
Realize that when one person is home, it costs less for them both to live
When two people work all day they are tired, and rightfully so. There are many things they do not have the energy to do themselves and pay others to do for them. But when one person is home they have time to make dinner. They have time to mow the lawn, clean the house, wash the windows, iron the laundry, and walk the dog. Many of the things dual income earners pay others to do, can be done at home for much less, and usually done better. Commonly it becomes cheaper for the person still working to keep working. The person still at home can make lunches, make coffee in the morning, and provide that needed childcare.
Many dual working couples have two cars, because they commute to two different parts of the city. But if one person is home, they no longer need the car during the day. That halves your car payments, car insurance, gas, maintenance, car washes, etc. The person home during the day can go grocery shopping in the evening using the only car, or maybe you live close enough to walk to a grocery store.
Examine your budget
Establish a baseline budget by examining your previous debit and credit card statements, bills, and rent/mortgage payments. Can you cover these costs with only 1 income? Ask yourself what can you truly afford. You must be honest with yourself. If you can cover all your basic expenses with only $2 left over, you’re setting yourself up for credit cards charges and loans.