These days, it’s increasingly important for families to learn how to live on a single income. While the average income for families with two working adults is £40,000, families with only one wage earner may have to make do with even less. For families accustomed to earning two incomes and being able to afford the things they want, cutting back to living on one income can sometimes happen suddenly and can take its toll on the family. To avoid this and live comfortably on a single income, these four tips should help.
Budget and Cut Back on Unnecessary Things
Living comfortably on one income is possible if you start by cutting back on all unnecessary things. A good example is takeout dinners and snacks, hardly used gym memberships and other memberships to clubs and associations. This alone can save you a lot of money.
Start by combing through your statements for the last few months so you can reflect on your spending habits. Highlight purchases that would be considered “wants” versus “needs.” Could you have avoided this purchase? Was there a better alternative? Is there a pattern that emerges when you look at all your frivolous purchases? If there is, it’s probably a poor spending habit that needs to be broken.
Consider Using Coupons, Rebates, Discounts and Sales
If you didn’t have to use any of these when you had multiple sources of income, you may need to consider using them now. With coupons alone, you can save up to 30 percent on your expenses. Same goes for clearance sales, rebates and discounts.
Take time to learn popular couponing strategies. Try to build your menu for the week based on what is on sale at the grocery store rather than planning first and checking prices later. For larger purchases like electronics, furniture or home improvement projects, check to see when it’s seasonally best to purchase them. Many products have a specific time of year when they’ll be cheapest. For example, outdoor furniture is usually cheapest at the end of summer when the demand is at its lowest.
Cut Down on Your TV Subscriptions
Consider this: How often to watch your favourite programs in real-time? Do you typically record them and watch later? Instead of having the most extensive TV packages, why not consider cutting back in favour of something more reasonable?
Many channels are accessible through their website for free 24 hours after airing. Your patience can pay off big if you downgrade to a simple streaming service, most of which are less than £15 per month. If you can’t seem to part with your cable package, downgrade to one that meets about 60 percent of your needs and settle for that. Maybe after a few months, you’ll realise how little cable you actually need and can downgrade even further.
Only Buy What You Can Afford
If you use a credit card frequently and consistently carry a balance, it’s important to break the habit, especially when you’re budgeting with a single income. The immediate gratification you receive from getting what you want then and now is a great feeling, but it wears off. Instead, you’re left with the finance charges and the added cost of convenience.
If you need to make a big purchase, save for it over time. This not only helps you, it also puts the expense in proper perspective. If you have to save for a while, it will help you reassess the importance of the expenses. It will also help ensure you live well within your means whilst still enjoying the things you love.