15 Key Tips For Living On One Income

Often, living on one income requires you to get creative with your budgeting and learn to prioritize your needs over your wants. However, it can also help you find joy in the simple (and free) things in life. Check out these 15 tips to help you live well on one income.

Living on one income

There are a lot of different people who can benefit from learning how to live on one income.

For example, you may be looking for financial advice for single ladies, or you may need ideas on how to survive financially as a single mom. Or perhaps you’re in a partnership where you made a conscious decision to have one parent stay at home to care for the children.

You may even be in a partnership where one of you is experiencing losing your job or difficulty finding employment.

No matter your lifestyle and no matter how many paychecks you bring home, you can find a way to live a happy, fulfilling life—without breaking the bank.

From practical budgeting best practices to money mindset shifts, here’s a look at how to live on one income.

15 Tips for success when living on one income

If you’re living off one income, you know how difficult it can be to pay the bills. But don’t worry, you’re not alone!

With these 15 practical steps, you can learn how to stretch your income.

1. Build a sustainable budget for your single income

When you have only one source of income, you need to be more intentional and strategic with your spending, as there may be less margin for error.

And it all starts with building a sustainable budget.

Here’s an overview of better budgeting when living off one income:

Calculate your average monthly income

First, add up your income over the past three months. Then, divide this number by three to get your average monthly income.

Calculate your average monthly spending

Similarly, you can figure out your average monthly spending with a quick equation. Just add up your spending over the past three months and then divide by three.

Get to know your monthly expenses

The first step in minimizing your monthly expenses is identifying your monthly expenses. After all, as the old saying goes, You don’t know what you don’t know!

Start learning your monthly expenses list by organizing your spending into different categories, like savings, fixed expenses (such as rent), and discretionary spending (such as nights out).

Compare your monthly spending to your income each month

The cold, hard numbers don’t lie. Once you’ve determined your average monthly income and your average monthly spending, you can see whether or not your current budget is working for you.

Pro tip: If your monthly spending is equal to or greater than your income, it’s likely time to reevaluate your monthly budget.

Adjust your budget as needed

Are you spending more than you’re making each month? Don’t get caught up in a spiral of shaming or blaming yourself.

Instead, take action to change your spending habits now.

You can start by learning more about how to navigate money spending problems. It’s also a good idea to create new habits for how to spend money wisely.

Remember that a sustainable budget for a one-income household looks a little different for everyone, so avoid the comparison game by focusing on what’s right for you and your income.

Track your budget every month

If it helps, you can consider your budget a living, breathing being. In other words, you want to keep track of your spending every month (or even every week) to ensure you stay on track with your spending and saving goals.

One way to help you keep track of your spending is by starting a spending journal where you record and reflect on every penny you spend. Building a budget can be challenging, but by staying positive and motivated, you can achieve your financial goals.

2. Cut back on expenses

Don’t beat yourself up if you’re spending more than you earn.

There are many ways to embrace extreme frugal living to spend less on expenses and stretch your dollars further.

For example, to cut back on expenses, you can:

  • Cancel subscriptions you no longer use
  • Shop store brands instead of name brands
  • Eat out only once or twice a month
  • Embrace couponing
  • Suggest free activities when you hang out with friends, like going for a walk or having a movie night at home
  • Negotiate with your phone, internet, and cable provider for a lower rate

With a little effort and some smart strategies, you can cut back on your expenses and make your single-income household budget work for you.

3. Build an emergency savings fund

Building an emergency fund is vital for achieving financial stability, especially when you have a single-income household.

Here’s a step-by-step guide on how to get started:

Set a savings goal

Creating a clear savings goal is the first step toward building a robust financial foundation. After all, it’s much easier to work towards a clearly defined goal than a rough idea.

Best practices for emergency funds suggest saving at least three to six months of living expenses.

So, to determine your savings goal, you can simply multiply your monthly expenses by three, four, five, or six. For example, if your monthly expenses are $3,000, your savings goal should be between $9,000 and $18,000.

It’s also a good idea to consider your lifestyle and job stability when calculating your goals.

For instance, if you have a stable, relatively secure job, then you may feel comfortable saving just three months’ worth of expenses. Conversely, if your income fluctuates month to month, you may choose to save up to six month’s worth of expenses for greater peace of mind.

Start small

To build your fund, begin by setting aside a modest amount of cash each paycheck or month. Remember that every little bit is important, even if it’s just $20 or $50.

By adding to your savings accounts slowly but surely, you can confidently grow your emergency fund over time. Plus, starting small allows you to ease into the process and adjust your budget as needed without feeling overwhelmed.

A good rule of thumb for saving is to follow the 10% rule, where you save 10% of your monthly income. Then, as you get more comfortable with saving, you can slowly increase the amount you set aside each month.

Make saving automatic

One of the easiest ways to grow your emergency fund stress-free is to make it automatic. Automating your savings means setting up automatic transfers to send money from your checking account to your fund every month, twice a month, or however often you want. The best part is that automatic transfers are completely hands-free, so you don’t have to worry about “forgetting” to save.

Importantly, by sending money to your savings whenever you receive paychecks, you’re establishing a habit of saving that can serve you for the rest of your life.

Keep your savings separate

Keeping your emergency fund completely separate from your regular savings or checking account is a crucial step in ensuring that the money is only used for emergencies.

By having a separate account, you’ll be less likely to use your emergency fund for non-emergencies, such as impulse purchases or vacations.

Additionally, having a separate account can help you track your progress toward your savings goal and make it simpler to manage your finances overall.

An emergency fund may also help reduce stress in emergency situations, as you’ll be able to protect your peace knowing you have a designated fund to rely on.

4. Factor in debt

Debt can be a burden, especially if you’re living on one income.

But with a solid plan and discipline, you can tackle your debt and take control of your finances.

The first step is to factor your debt payments into your budget. This means allocating money from your monthly income to pay at least your minimum payments—on time. Above all, make sure you prioritize your debt payments over non-essential expenses.

Another helpful strategy is to look for ways to reduce your debt.

Reducing debt could include learning how to negotiate credit card debt with creditors for lower interest rates or setting up a debt repayment plan, such as the debt snowball worksheet method.

It may be a long journey, but every payment brings you one step closer to financial freedom and that glorious, living debt free feeling.

To help you stay disciplined, motivated, and consistent in your debt repayment plan, check out these inspirational debt free quotes.

5. Maximize your income-earning potential

While it can certainly take time to navigate the job market and find ways to increase your income, remember that it’s not impossible.

Here are several tips to help you create multiple sources of income:

Invest in yourself

Learning how to invest in yourself by taking some courses or obtaining certifications is a great way to enhance your skills and increase your value as an employee.

By staying current with new technologies and industry trends, you will be better equipped to handle challenges and develop new ideas. An investment like this can lead to greater opportunities for career advancement and increased income.

Negotiate your salary

When starting a new job or during performance reviews, it’s important to negotiate your salary and benefits package to ensure that you are being fairly compensated for your skills and experience.

Be bold, and don’t be afraid to ask for a higher wage or additional benefits such as flexible working hours or increased vacation time.

Do your research and come prepared with specific examples of your contributions to the company. Remember, negotiating your salary is not just about earning more money but also about ensuring that you are being valued and respected for the work you do.

If you want to increase your income without changing your job, you can also learn how to ask for a raise.

Start a side hustle

Exploring different side hustles for women can be a smart way to earn more money and develop new skills outside of your full-time job.

Whether it’s freelancing in your area of expertise or starting a side business based on a passion or interest, these opportunities can provide additional income streams and potentially lead to new career opportunities.

However, be sure to carefully consider the time commitment of your potential side hustle before getting started. That way, you can make a plan to effectively balance your new project alongside your full-time job so you can avoid burnout.

Finally, it’s also important to ensure that any side hustle does not conflict with your employment contract or company policies.

Grow your professional network

Love it or hate it, networking is an important aspect of career development that involves making connections within your industry and building relationships with like-minded professionals.

By attending networking events and joining industry groups or associations, you can meet new people and learn about potential job opportunities or clients that may benefit your career growth. It’s important to be genuine in your interactions and show interest in others’ work to build trust and rapport.

If you can’t attend these groups or events in person, you can also find ways to network online if meeting in person isn’t possible.

To help you get started, check out these networking tips for a career boost.

6. Seek out free resources and services

There are plenty of resources and services out there that can help you save money and stretch your budget while living on one income.

One excellent option is to look for free community resources.

For example, consider heading to the library to check out books or magazines instead of paying for online subscriptions or going to the bookstore. You can also propose a clothes swap with friends instead of cashing out at the store.

And remember, for financial help, there are plenty of free online resources for budgeting, saving, and investing.

Another way to save money is to explore government programs that can assist with healthcare and housing.

However, be aware that some of these programs have income thresholds, so check if you’re eligible.

Finally, ask for help from friends and family if you need to. You’d be surprised how many people are willing to lend a hand or offer support during tough times.

7. Plan for unexpected expenses

Facing unexpected expenses is never fun—and it can feel even more stressful when you’re living off a single income.

The best thing you can do to help ease the burden of unexpected expenses is prepare, prepare, prepare!

Check your insurance

Sure, making regular insurance payments is never fun. But you’ll be happy if you have the right coverage in place in the event of an emergency!

To help safeguard yourself against financial emergencies, be sure you purchase the correct types of insurance coverage for your lifestyle, such as:

  • Health
  • Home
  • Renter’s
  • Car
  • Life
  • Pet

Take preventative measures

Remember: It’s almost always cheaper (and often easier) to maintain and care for your belongings than replace them.

For example, you can care for your car and help prevent future expensive repairs by regularly changing your oil. Similarly, you can help avoid expensive damage to your home by doing routine chores like cleaning your gutters.

These projects may not be fun, but they sure beat paying a hefty, unexpected bill!

Of course, surprise expenses are a part of life, but with some planning and preparation, you can minimize their impact on your budget.

8. Create a financial plan

If you’re trying to live on one income, having enough money can be a challenge sometimes. But creating a solid financial planning process and sticking to it can make a world of difference.

Start by setting clear financial goals, and then make a plan for how to achieve them.

Remember, it’s all about finding a balance that works for you and your family.

9. Prioritize needs over wants

If you really need to trim the fat from your monthly budget, it’s important to prioritize your needs vs wants.

Understandably, it can be tempting to splurge on things that make you happy at the moment, like ordering take-out or buying a new pair of shoes. But if you’re committed to long-term financial wellness, then you’ll likely need to take a more disciplined approach to your spending.

Take the time to evaluate your expenses and distinguish between what you truly need and what you simply want. Doing so will help you make more mindful spending decisions and prevent overspending.

And remember, it’s okay to treat yourself occasionally. (And there are plenty of budget-friendly ways to treat yourself, too!) Still, when it comes to budgeting and living on one income, needs should always come first.

10. Find affordable ways to enjoy leisure time

It’s easy to feel like you can’t do anything fun without breaking the bank, but that’s not true!

Truly, you can find many ways to save your pennies while still relaxing, having fun, and spending time with friends.

For example, you can go for a walk in the park, have a picnic with your family, or visit a local museum or art gallery. You can also look for free events or classes in your community or get creative with DIY projects at home.

The key is to prioritize self-care and socialization without sacrificing your financial goals.

Need some inspiration? Discover 40 fun things to do for free with friends.

11. Stay motivated and focused on financial goals

When you’re dutifully saving every month, making your debt payments, and staying away from fancy restaurants and expensive stores, it can be all too easy to lose your motivation to save.

To stay inspired and focused, it’s important to remember why you set financial goals for yourself in the first place. You may hear this referred to as “find your why.

You can also check in with yourself regularly and reflect on how you feel about your financial situation by money journaling.

Above all, don’t be discouraged if you experience setbacks. We all overspend sometimes.

12. Communicate openly with your partner

If you are in a relationship where you share one income, it’s important to remember that you and your partner are a team.

And it may seem obvious, but it can’t be overstated: Communication is vital.

If you haven’t already, sit down with your partner and have a real talk about money. By openly discussing financial goals, concerns, and budgeting for couples, you can be sure you and your partner are on the same page so you can make informed decisions together.

13. Stay flexible and adjust your plan when needed

Life can be unpredictable. Sometimes, no matter how much you budget and plan, unexpected expenses still come your way. That’s why it’s crucial to stay flexible and be ready to adjust your budget and financial plans when needed.

For instance, your income may change, you may decide to start saving for a house, or you may be expecting a child and need to create a baby budget. Whatever the case may be, remember—your money is supposed to work for you, not against you.

That means your budget should change and evolve throughout your life as you do.

There are plenty of different budgeting methods you can try, so don’t be afraid of changing your financial plan as you grow.

14. Teach your kids to embrace frugal living

Trying to figure out how to live on one income is particularly challenging if you are also raising a family. But there are ways to stretch your family’s income with frugal living tips.

For example, to make your family’s income work for everyone (from you to your partner to your kids), you can organize budget-friendly family night ideas, look for ways to save with your back to school shopping list, and figure out some at home date night ideas for you and your partner.

This is also a great time to start teaching your kids about money so they can learn financial literacy from a young age.

15. Learn to meal prep

It may sound silly, but changing up your eating and cooking habits can go a long way in helping you save money.

For example, when you create a monthly meal planner, you’ll know exactly what you need at the grocery store weekly. This helps keep you focused so you don’t randomly fill up your cart with food items you don’t need.

Plus, learning budget meal planning just makes cooking easier. In turn, this translates to fewer nights where you call in expensive take-out because you don’t know what to cook for dinner.

Get started meal prepping right now by picking next week’s meals from this list of 25 of the cheapest meals.

Expert tip: Make it easier to live on one income by hitting unsubscribe

A tip like this won’t make you extra money—but it sure can help you save. First, unsubscribe from all subscriptions that you don’t use, even those $5 subscriptions that you don’t think are a big deal. After all, $5 every month adds up!

Next, head to your email inbox and unsubscribe from as many marketing emails as you can. The fewer advertisements, sales, and coupon codes you see, the less you’ll be tempted to click “Add to cart”.

Try it—you may be surprised by how much smaller your credit card bill is at the end of the month.

How can I afford a home on a single income?

To afford a home on a single income and to prepare for first-time home ownership, the preliminary steps include determining what you can afford, building your credit score and saving for a down payment. Importantly, you must also know what you can afford so you don’t end up house poor.

If you are living on one income, you can also research relevant government programs to help you more easily afford a home.

How can you afford life on one income?

Knowing how to afford life on one income can be challenging, so the best thing you can do is to learn to live frugally. In the future, you can also take steps to increase your income, for instance, by building passive income streams.

Remember to be aware of your budget and your financial goals at all times so you don’t spend unnecessarily.

Why is it hard to live on one income?

It is hard to live on one income because it basically means you have to support multiple people without getting multiple paychecks. This can be especially challenging if you have kids or lots of debt.

Whether you’re supporting just yourself, a partner, or an entire family, you can help ease the burden of living on one income by creating a budget that fits your lifestyle and cutting the budget if necessary.

If you enjoyed learning how to make the most of living life with one income, read these posts next:

Living on one income will require consistency and dedication, but you can do it!

Living off one income can be challenging, but it is achievable with careful planning, prioritization, and flexibility.

By taking these steps, you can reach financial stability, reduce stress, and focus on what truly matters. Don’t be afraid to seek resources and support along the way, and remember that small steps can lead to big changes.

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Scroll to Top