I often get asked the question – “How can my family live comfortably off of a single income?”. In my response, I always let people know that it is possible and is not that hard. My wife and I have chosen to support our family on one income (by me) and have her stay at home with our two children. While there can be some ups and downs and financial uncertainty raising a family from a single income, the benefits are well worth it.
Photo by Kevin N. Murphy via Flickr
So how can we afford to live a comfortable lifestyle in today’s society on a single income? Mostly by proper planning and having a good understanding of our financial situation. If you are interested in hearing more, I strongly urge you to keep reading. I have included a few examples of common daily activities that we use to make it work. Hope you enjoy!
Using coupons and shopping the bargains is one way that my family is able to live comfortably off of a single income. We are sure to scan the weekly ads to all of the grocery and pharmacy stores looking for the best deals of the week. This can become very time consuming, but taking advantage of websites like Money Saving Mom and Couponing 101 have really helped us to match up coupons with the latest deals. There isn’t a week that goes by when we don’t get something for FREE!
Besides groceries, there are other items that we try to save on. Shopping for clearance seasonal items usually help us find some great presents and gifts for upcoming holidays. We also take advantage of credit card rewards by banking points. These points are redeemed normally right before the holiday’s for gift cards that are used to purchase presents for family. We have been known to redeem over $300 in gift cards just from using these points!
If you decide to shop online, there are plenty of additional deals that you can find. Be sure to always look for a coupon code before you make any purchase. Look at sites like ours or RetailMeNot as a starting point. Even if there is no code, you can still use sites like eBates or SwagBucks to earn rewards for online purchases.
Creating alternative income streams is not a luxury, it has not become a necessity for single income families. Just look at what has happened with the most recent economic downturn? Unemployment is rising, people are losing their jobs, and families are struggling to pay their monthly bills. Adding additional income streams (other than your main income source) can help protect you and your family during lean economic times.
My wife and I have made it one of our goals to create these alternative income streams to help protect our finances. If you need some help thinking of ideas, check out 40+ Alternative Income Ideas and Resources for some really great tips.
Do you own your own home? Are you a renter? Either way, you probably have had to pick up a utility bill at some point that can put a real strain on your monthly budget. There are electric costs, gas bills, water and sewer fees that typically come with owning or renting. Unless you want to live in a tent, these monthly fees are unavoidable. The key is to try and limit your energy and utility usage so that you can maintain a decent way of life without breaking your budget.
So how can a family limit their energy and utility costs? There really isn’t one solution that will drastically reduce your bill without shutting off the utility. However, there are plenty of opportunities that collectively will reduce your monthly payments and put money back int your pocket. Conserving and limiting your utility and energy expenses is an important part of surviving comfortably on a single income.
What do you do with financial windfalls (large sums of money) you may get from time to time? Do you invest this money or put it into your savings account? Maybe you use it to buy a new television or car? If you are living in a single income family, this money can actually be put to good use by paying down debt, paying off additional principal on your mortgage, or even purchasing some dividend paying stocks. The key here is to use any windfalls to your advantage instead of squandering them on frivolous items.
Don’t think you ever get back any financial windfalls? Getting back money from your tax return is a good example. This is money that you probably had not expected, so avoid the temptation to spend it and put it to good use! Every year my wife and I put our federal tax return money directly back into 529 College Savings plans for our children. This allows us to continue to live on a single income while still investing in our kids future.
What tips can you provide for raising a family on a single income?