The circumstances don’t really matter. That fact is that it’s completely possible to support a family on one income – even on a small one.
Here’s how to prepare.
Save an Emergency Fund
If you’re planning to go down to one income make sure you have some savings set aside. You never know what kind of expenses will pop up and it’s extremely important to be prepared.
If you skipped this step and are already down to one income with no savings you’re not doomed. Just start setting aside anything you can afford specifically for an emergency fund. Even five dollars at a time will work.
Give Up the Unnecessary
Most people would advise you to get rid of your cable, find a cheaper phone, and all of that other stuff that doesn’t really save you a whole lot of money. Those are good things to do, but if you’ve just had your income cut in half or better those things probably aren’t going to help.
You need to focus on the big things.
Housing – If more than fifty percent of your income is going to housing you need to make a change. Downgrade your home, move to a different area, of bring in roommates to help cover the costs. You’re not going to be able to make it if the bulk of your income is tied up in living expenses.
Cars – If you have a car payment get rid of it. Trade your car in for a cheaper model, sell your second car, do something – anything to get rid of your car payment.
Work on lowering these two expenses first and then after that concentrate on negotiating cheaper prices for the rest of your bills.
Create a Budget
Once you have lowered your expenses it’s time to plan for them. Get out a piece of paper and write down every expense you can think of. Be completely honest with yourself. If you know you’re going to spend $20 a week on fast food then write it down. There’s no shame in it.
Now you know what to plan for. Calculate how much money you’ll have coming in and see if it’s enough to cover your expenses. If not you have two choices: work more or cut back.
Keep tweaking as you go.
It’s Amazing What You Can Do When Your Back’s Against the Wall
I truly believe that you don’t know what you’re capable of until your back’s against the wall. When you have no other choice than to be creative in the way that you manage your money you’ll find that making sacrifices really isn’t that difficult.