Living on a Single Income: 7 Years and Counting.

This year my wife and I are celebrating our 7th year anniversary of living on a single income. It doesn’t seem possible that it’s been so long. We had a beautiful newborn when we started out, and since then our family has blossomed to 3 wonderful children. My wife and I felt that our children would benefit more from having one of us as the caregiver instead of someone outside the family. So without much forethought, my wife left the workforce shortly before the birth of our 1st child.

In many ways, we were lucky to have been successful without much planning. Today, many couples and families find themselves living on one income out of necessity rather than choice. The Great Recession has left millions of people unemployed, and many millions more wondering if they could get by on one income if they had to.

The good news is that anyone can do it, but having a higher income may mean you need less planning.

Here are some lessons I’ve learned along the way that may help you, whether you’re thinking of life on a single income to help raise a child or you have to live on a single income because you have lost or may lose your job.

How to live on one income

Communicate. Being in agreement with your spouse or partner is absolutely essential to living on a single income. If one of you is not upholding your part of the arrangement, then both of you will fail. It’s important to talk about how each of you view your role, as well as your feelings and concerns along the way. It’s very easy for the bread winner to feel more important than the partner who is staying at home, but both have parts to play.

In our house, I’m the one who works to bring home a paycheck, but my wife views her role as making that paycheck go as far as she can. To that end, she clips coupons, only buys items on sale and looks to cut costs wherever she can. She makes her own bread, and cooks all the meals for the family. We simply would not be able to live on my income alone if she didn’t do those things. Living on one income is a team effort.

Keep a close watch on your spending. Some people create a budget and stick to that for all their expenses. Others simply automate savings plans and bill paying, while keeping tabs on their discretionary spending. Whatever method you use, you need to be able to account for all the money coming in and all the money going out. It seems ridiculously simple, but the truth is that the American standard of living is such that many double income families spend well beyond their means on an daily basis. That simply is not possible to sustain for very long on one income.

Trim more than just the latte. Cutting your expenses is a necessity for making the transition from a double income to single income, but skipping the extra latte alone isn’t going to make that transition happen. You’ll need to make a serious assessment of what is essential and what isn’t, and cut the extras. While you may get by without cable, you can’t do without other expenses like auto insurance for example. If you live in a state where insurance is mandatory, shop around and save on car insurance.

Wave ‘goodbye’ to the Joneses. I can say from experience that there is no way you will keep up with your neighbors spending while they are on a dual income and you aren’t. But the good news is that you will likely find yourself much happier, since you won’t be so focused on materialistic aspects of living. My family and I simply don’t have the extra money for the latest video games or movies, but we still have fun with things like family game night. And I think we’re much closer as a result.

Don’t trim too much. While it’s imperative to cut spending, you shouldn’t touch savings. You’ll still need to save for retirement, for example and you’ll find that saving up to buy that big ticket item is also a necessity when you’re living on a single paycheck.

Take baby steps. If you have the opportunity to take a trial run, then do it. Living on a single income is not a stress-free lifestyle. Some couples don’t get to make the choice. If one partner is laid off, then adjusting to life on one income is a new reality. My wife and I were fortunate enough to have had the choice. When our first daughter was born, unemployment in the U.S. was near 5% and I was riding the wave of yearly, automatic pay raises. These days, few people are lucky enough to be able to count on a yearly raise, and millions more can’t even count on having a job.

Lessons from living on a single income.

Even though my wife and I have to live on a single income, we still didn’t plan or prepare enough ahead of time. Another thing we’ve learned along the way is that most people really can’t afford the car they drive. Living on just my income has really driven that point home. We have a 2 year old minivan that we bought used when our 10 year old family car couldn’t hold 3 car seats, and I drive an 11 year old car to work every day.

Another sacrifice we’ve made is paring back our lifestyle. Most of our friends have flat screen, hi-def televisions sets, but we still have a 27-inch CRT television. We have used furniture that has been gifted to us by our friends (the Joneses) when they buy newer, more stylish models. Our kids know all about hand-me-down clothes first hand. Besides wearing their siblings used clothes, we’ve even purchased many clothes from consignment shops. All our kids wore generic diapers, and passed toys on to younger siblings.

The result of much of this has been that our kids view material things differently than other kids. They don’t think of things as disposable. They don’t expect to get the latest fad simply because “all the other kids” have one. Sure there are times when they shed some tears over not having the name-brand gizmo their friends have, but in the end I think they’re far less materialistic than their peers. Besides, they’re learning important money lessons that will serve them well throughout their lives.

Lastly, avoiding debt is a big factor in success. You aren’t going to be able to get ahead, much less stay afloat if a sizable chunk of your income is going to pay off something you bought yesterday or last year. You have to get used to living below your means, but once you make that adjustment you’ll find that saving, investing  and reaching your goals is not only possible but much more satisfying. Living on a single income isn’t as difficult as it seems, but living comfortably on a single income is damn near impossible if you’re saddled with debt.

Related Posts:

• 5 Small Sacrifices to Save Big.
• Minimalism vs. Simplicity – Are You Missing the Point?
• When a $50,000 Salary Can Feel Like Minimum Wage.
• 7 Tips for Cutting Spending and Putting Cash Back in your Pocket. (video)
• How to Waste Your Money in 15 Easy Steps.