Often when I tell people that I am a stay at home mom they usually think that my husband makes really good money! I hear stuff like, “I wish I could stay home with my kids. We just couldn’t afford it!” This always makes me so sad.
I know everybody’s situation is uniquely different. But, I wanted to share how we manage to live on one income, yes, even an income that is actually considered below federal “poverty level”!
Be encouraged. Here are some tips that will help you get by on one income – no matter how small that income might be!
Are you planning on cutting down to one vehicle now that only one of you is working? Even if you plan on keeping two cars, here are some tips to help you save money on vehicles and vehicle-related expenses.
Never have a car payment.
We sold our two vehicles (one we were still making payments on) and downsized to one paid-for vehicle in order to shed a $200 per month bill. Having one less car also reduced our auto insurance.
Yes, having only one vehicle was an inconvenience, but we were able to take that saved money and apply it toward other debt to work our way toward financial freedom more quickly. And it wasn’t long before we were quite used to coordinating our plans around who got the car.
There is a lot of “frill” in most insurance. Speak to your agent about what you can do to reduce your bill. Now that we have worked our way to owning two vehicles again (both paid for) we carry full coverage on our “family” vehicle, and just the bare minimum on hubby’s truck. If something were to happen to his truck, we’d still have the van as a backup.
You might want to consider refinancing your car or truck (or other loans for which this might make sense). By refinancing, you can reduce our monthly expenses by paying off the remaining balance over a longer period of time or you might be able to save money over the life of the loan with a lower interest rate. Consider whether this is something that makes sense for you!
Here are some tips to help you save money on healthcare costs while living on one income.
What sorts of things can you do to help you save on the costs of healthcare in the future? If you don’t need to go to the doctor very often, your premiums are going to be lower, you’re going to save time, and of course, this likely means you’re healthier overall, too!
Eat a healthy diet, take your vitamins, and get plenty of sleep and exercise. These simple steps can end up saving you a boatload of money in the future.
We switched my insurance to an HSA (Health Savings Account) with a High Deductible Insurance plan. I hardly ever go to the doctor, it’s been several years since I have been sick enough to need one. So, it saves us money. It’s a good option for generally healthy people with no medical conditions.
If I do go to the doc I pay out of pocket (like $100), but it’s usually at a discounted rate. The Savings Account is for you to put the money that you are saving from switching to the higher deductible plan into a safe place for when you do need to go to the doc or whatever. Then you’ll have the money to cover your out of pocket expenses when you need it.
If something terrible were to happen, and I ended up in the hospital, the insurance would pay 100% of the bills after my deductible was met. It’s good to have whatever your deductible amount is in savings, just in case you ever need to use it.
We didn’t switch my husband to this plan because the insurance through his work was actually cheaper. Adding me to his employer’s insurance plan was more expensive than me buying it individually.
While we’re talking about health insurance, remember that it pays to revisit your health insurance coverage frequently. As a result of the pandemic, many state and federal programs have changed the income thresholds necessary to qualify for services like Medicaid.
You may also be able to tap into community resources. If your income was lost due to a disability or injury, you can look into state disability insurance or community resources. If you’re a member of an alumni group, church, union, or nonprofit, there are often resources that can help you get your feet back on the ground (like subsidized child care or healthcare resources).
- Set a grocery budget. A realistic one. And stick to it.
- Only use cash when shopping.
- Don’t shop hungry!!!
- Tell the kids “NO” and mean it when they beg for something not on your list. When my kids ask, “Can we get this?”, I counter with, “Did you bring your money?” If they didn’t, then that’s the end of the discussion.
- Make a weekly menu, then shop for the necessary ingredients.
- Shop with a list… and stick to it!
- Check out your store’s sales online and try to plan your menu around it. If chicken is on sale for .99 cents/pound, you should have a lot of chicken on your list!
Don’t go buying a Sunday paper just for the coupons, there are other ways to get your hands on them.
Ask people who you know gets the Sunday paper if you can have the coupons, ask your local recycling facility if they mind if you gather the discarded coupons out of the papers, put an ad on Craigslist asking for any unwanted coupons (I’ve had luck with this), and our local library has a coupon center where coupons are free for the taking. Gather as many as you can get your hands on!
Coupons are great, but remember to coupon wisely. Don’t clip coupons to buy things you don’t use or need. Instead, only go the “extreme couponing” route if you know you will use the coupons. When you clip wisely, you can save a ton of money.
Coupons not your thing? You can save a lot of money by using a rewards credit card, too. Again, make sure you are only using your credit card on things you actually have money for – some people like to use rewards credit cards just for gas or groceries, for example.
This can give you a small amount of “free” money every time you spend – again, just remember to pay that bill on time, or the interest charges will definitely NOT be worth it.
Plan frugal menus, and make as much as you can from scratch. Ditch the convenience foods! Unless you can get a box of cereal for a dollar or less, don’t waste your money. It doesn’t take that long to fry an egg for breakfast!
Treat your thermostat like a crockpot… Set It And Forget It! We set our heat to come on at 68*, and our A/C to turn on at 79*.
If your power bills are outrageous, consider having an energy audit done. If you are lower income there are Weatherization Assistance programs out there which will provide you with a free energy audit and will also fix any problem areas in your home.
(We were tempted to have this done, as we totally qualify, but when we thought about taking government handouts we were too convicted to accept. We each have our own convictions, just know the program is out there if you NEED it.)
Telephone / Internet
We do have both, though we could easily go without if we needed to. We do not pay for the long distance plan on our telephones, so whenever I call family out of our area my conversation usually begins with, “Hey! Can you call me back?” I know they have free long distance, and they are happy to save me a dime a minute!
We chose the lesser of the high speed internet plans, which is still good enough for us. I’d rather have no internet than dial up!
Our cell phones are prepaid. Mine is only used for emergencies. I don’t even know my own number, nor do I give it out. It’s just nice to have peace of mind that if I break down on the side of the road I will be able to call for help.
Nobody needs cable or satellite. We’ve actually enjoyed not having it!
If you aren’t ready to totally cut the cord from your television habit, know that there are easy ways to still watch television without having to commit to a costly monthly bill. You can subscribe to streaming services like Netflix or Hulu, paying just $8 per month for service rather than $150.
Plus, you can pause these at any time – something that works well for my family is “pausing” television during busy times of the year, like the spring planting season, since we don’t have much time to watch anyway. We end up being more productive AND save money on our monthly costs!
I wrote a whole post on money saving tips for eating out. You can still do it, even on a tight budget!
“Previously owned” is a nice way to think of second hand stuff. We hardly ever buy brand new clothes. And if we do, it’s only because I got a killer deal. (Like a couple of days ago, I got myself a shirt and Jada a shirt for a total of under $4 at Kohls. That’s better than Goodwill!)
Remember, just because you can’t spend a lot of money doesn’t mean you have to look poor! There are great deals out there, just try to buy a season ahead so that you don’t find yourself needing something last minute.
When our kids ask for something we tell them we’ll put it on their Birthday list. It is a very special thing if we surprise them with a little toy for no particular reason.
Every now and then, if we find a good deal on something, we will get it for them. But we very seldom buy anything when they ask for it, and we never buy anything over a few dollars unless it’s as a gift. And believe me, they are lacking nothing!
The very best tip I can give you if you are trying to survive on one income? MAKE A BUDGET.
Without a budget, you’ll have no idea how much you are spending and where your money is going. By making a budget, you can understand exactly how much you can afford. It’s a good idea for anyone but especially a family with limited income.
Write down your budget with specific categories – and stick to it. You can use free online budgeting tools if you find that you are having a difficult time staying organized – good options include Mint.com and Mvelopes.
Living within your means is incredibly important, especially if you plan on surviving on one income. Don’t rack up bills on a credit card or go on a shopping spree. Debt isn’t worth it.
Remember, if you lose that one source of income, how will you pay for those bills? Be sure to differentiate between wants and needs before you reach for a credit card or take out a loan.
Prepare in Advance
If you want to be a stay at home parent and it’s something you’ve always dreamed about, I applaud you. It’s incredibly rewarding to be at home with your kids – and it’s even better when you’re able to plan ahead for this.
If you can, wait to transition to life on one income until you have an emergency fund set aside. Make sure you have at least six month’s worth of expenses saved. That way, you won’t be left in the lurch if an emergency happens (like the car breaking down).
In addition to having an emergency fund, there are a few other things you should do, too. First, make sure you’ve paid down as much debt as possible. That’s especially true on high-interest debt like car loans, student loans, or credit card bills. I’m not really talking about mortgage debt here.
If you can push back the timeline to switching to one income in the interest of paying down some debt, do it – you might have to wait a bit longer to quit your job, but it will be worth it when you consider the added stress of extra debt on one income.
You can also consider our income tax withholding. You might be able to adjust it to increase your allowances, given your smaller household income. Consult with a tax professional to find the best option for you.
Make Some Extra Income
This might not be an option for everyone, but for some people, it can be a lifesaver. Once you’ve cut all the expenses you possibly can from your budget, you might still be left with a few gaps.
A great way to fill in those gaps is to see where you can earn some extra income. Can you do a few hours of work per week, perhaps doing some freelance writing, babysitting, or selling farm products?
Consider starting a small at-home business but do be aware of the risks of work-from-home schemes and pyramid schemes.
If you’re right on the cusp of quitting your job, consider whether you want to disconnect entirely from the working world – or just temporarily. Some people may want to live on one income only until their kids are in school – and then they might want to go back.
If you aren’t sure, you may want to keep one foot in the door by doing some consulting work or freelancing. This will bring in extra cash while also letting you stay connected.
Downsizing serves two purposes – one, it will help you declutter your home so it’s clear and easy for you to see what you have and where it is (no more running to the store to buy something only to realize you already actually have it).
We love stuff, as Americans, but most of it, we don’t really need. The other purpose of downsizing is that you can sell some items on eBay, Amazon, Craigslist, Facebook Marketplace, or even in a yard sale. By doing that, you can make some extra money to supplement a single income.
Once you get rid of all the clutter, take a look around your home. Do you need as much space as you currently have? If you find that your home is way too big, a great way to save money on one income is to downsize your house. Not only will you save on the upkeep, taxes, and utility bills, but your mortgage payment will likely be much less, too.
Be As Self-Sufficient As Possible
In our modern age, we pay a lot of extra, unnecessary money for convenience. Grow your own vegetables in a home garden. Make your own baby food. Do your own car maintenance. Sew your own clothes.
While it does take time to build the skills needed for self-sufficiency, it’s a great way to save money and thrive on one income.
Do your best to find the lowest price for everything. Are you buying? Buy used. Buy refurbished. Join a trading program on Facebook or another website, like Nextdoor.
Sign up for email newsletters to be notified of upcoming deals and wait to shop until you can get the biggest discount.
How Will You Manage Finances?
Some families decide that the person who has more time should handle money matters, while others like to have both partners involved. That’s up to you, but when you switch from one income to two, it’s a good idea to figure out the nitty-gritty details.
You might maintain a joint checking account or you could have linked accounts for easy transfers. Whatever you choose, it’s important that both partners have access to funds.
Be Willing to Sacrifice
So, those are just a few ways that we save money around here. I think that everybody is able to do most of the things I’ve mentioned above.
That said, many of the things I’ve mentioned above do require a bit of sacrifice. You might not be able to go out with your friends or travel around the world as much as you’d like.
But with a bit of saving and pinching pennies, you can get by on one income so you can do what matters most – be home with your family.
I am so blessed to be able to stay home with my kids. Every sacrifice that we make is a thousand times worth it!!
Do you have a money saving tip to share? I’d love to know how you are scrimping and saving in your home, or how you survive on one income!
updated 08/19/2021 by Rebekah Pierce
A city girl learning to homestead on an acre of land in the country. Wife and homeschooling mother of four. Enjoying life, and everything that has to do with self sufficient living.