Lately, I’ve been thinking about how my partner and I will adjust to living on a single income. We’re still undecided about having kids, but if we do start a family, I will probably become a stay-at-home mom. My mother was a homemaker and was able to create such a cozy home environment and give my sister and me lots of individualized attention. Naturally, I want the same experience for my future children.
Even though we’re pretty frugal, supporting a family on one income will still require significant lifestyle shifts. If I become a homemaker, here are 4 ways I’m planning to downsize our lifestyle so we can thrive on a single income and keep meeting our financial goals.
Start Valuing Monetary Savings More Than Time Savings
I primarily work as a freelance writer, which means my earnings are directly tied to the amount of work I complete. The more hours I’m able to put into my writing business, the more money I make. So it often makes sense for me to splurge on time-saving conveniences that allow me to work longer hours.
For example, a Lean Cuisine dinner isn’t much more expensive than a home-cooked meal. I can usually save between 30 minutes and an hour by heating up a Lean Cuisine instead of cooking. If I use some of the time I save to do extra work, I know I’ll make more than the frozen meal costs, so buying it is a net gain.
However, this time vs. money equation will change completely if I become a homemaker. The work that homemakers do is extremely valuable, but it doesn’t bring income into the home directly. So if I decide to stay home, I’m planning to optimize our household for monetary savings rather than time savings.
Instead of taking the easy route and heating up a Lean Cuisine, I’m going to cook from scratch every night. I’m also planning to start doing other frugal tasks I don’t have time for now, such as patching clothes and baking homemade bread. Hopefully, these lifestyle changes will help offset the loss of a second income and allow us to continue saving money at the same pace.
Only Keep One Car
Another frugal tip that can help you thrive on a single income is to only keep one vehicle. Although getting kids to school and activities can be more complicated as a one-car family, there’s no better way to save money than downsizing your transportation costs. Transportation is one of the biggest spending categories besides housing for most people. You can cut your transportation costs nearly in half instantly by selling one of your cars.
My partner and I have already been able to implement this savings strategy. Since I work from home and don’t have to commute to an office, I don’t need my car. We plan to set aside the money we would’ve spent on a second vehicle for the next few years. This will give us a nice emergency buffer if we decide to expand our family and go down to one income.
Recategorize Expenses as Needs, Wants, and Wishes
I saw a great blog post the other day about categorizing your expenses as needs, wants, and wishes. Needs are expenditures like your housing costs and utility bills. Anything essential like gas and groceries goes on this list.
Wants are things you desire and value that you actively make room for in your budget, such as eating out or going on vacation twice a year. On the other hand, wishes are expenses you wish you could make room for in your budget. They’re items that you might eventually splurge on if you get enough raises at work or come into some money.
Unfortunately, going down to a single income means that many of our current wants will become wishes. Before we make the switch, we’ll have to recategorize our expenses based on our more limited household income and cut a lot of fat from our budget. Right now we enjoy splurging on nice kitchen tools and going to concerts a few times per year, but that will probably stop if we have kids and leave DINK life behind.
Go through your budget and see what kinds of sacrifices you’ll need to make to thrive financially and save money on a single income. Figure out whether or not you’re willing to implement those changes. If not, you may need to get creative and find ways to increase your household income before you can become a full-time parent. You could get a part-time job on nights or weekends and your partner could work on upskilling to secure a higher-paying position, allowing you to afford more of your wants and wishes.
Manage Risk
There’s an element of risk involved in becoming a single-income family. If the primary breadwinner becomes injured, for example, it may be hard for the stay-at-home parent to pick up the slack. Returning to the workforce after an extended break can be difficult. Homemakers usually have to take a significant pay cut to get back on the career ladder.
But you can manage this risk by purchasing disability and life insurance for the primary income earner. Your spouse can also add funds to a spousal IRA so you have your pot of retirement savings. To avoid losing too much ground in your career, you can keep upskilling in your free time and take on some small freelance projects or volunteer work. That way you’ll have new achievements to put on your resume that will help impress potential employers if needed.
Bonus Idea: Start focusing your time on productive activities. For example, instead of gaming in the evenings, you could spend your time building extra income streams or improving your financial knowledge.
Do you have any tips for thriving financially and saving money on a single income? Share them in the comments!
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Vicky Monroe is a freelance personal finance and lifestyle writer. When she’s not busy writing about her favorite money saving hacks or tinkering with her budget spreadsheets, she likes to travel, garden, and cook healthy vegetarian meals.