You’ve read about people successfully living on one income but they all seem to earn 6-figures.
Hello real world!
Learning how to live on one income in a two-income world is hard, especially when you and your partner do not earn six figures.
You want tips for low income living that don’t rely on one of you earning big bucks or giving up everything that you enjoy just to make ends meet.
You still want a nice lifestyle right?
When you are thinking about living on that low income you need to know that:
It is more about the little things you do, not the big things.
Yes big bills can be cut, maybe once, but often you can’t. You can’t reduce your mortgage by half without it impacting on your life in other ways.
So remember, as a one income family, every little thing you do by saving a few dollars here and there WILL make a difference.
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25+ Tips For how to live On One Income
Budgeting Your money as a one income family
1. Create a budget
Every penny of your single income needs to be given a job and that is what the purpose of a budget is, to tell your money what to do.
You need to control your money, what you spend it on, where it goes and not overspend. Using a spending tracker will help you keep track of your finances.
Write down everything you spend and compare it to your budget. It can be quite eye opening, but so helpful!
For budget help the Empower app is the perfect choice, it makes budgeting so simple even I can use it. Empower is an award-winning mobile app that makes managing your money the easiest thing you will do all day.
Writing out your budget or using a spreadsheet can be time consuming whereas Empower makes budgeting so easy, no need for multiple apps for saving, budgeting and banking as these are all features of the app.
“Empower is a financial technology company, not a bank. Banking services provided by nbkc bank, Member FDIC.”
2. Have a families finance officer
Financial decisions should always be shared but to be successful when your budget is tight, it helps to have a Families Finance Officer (FFO) in charge.
In charge of managing the families finances. In charge of ensuring you are paying the least possible on your bills. Ensuring you don’t pay fees on your checking account. Your FFO keeps things ticking over and helps the family keep on track towards your goals.
If you get paid biweekly then head over to my post on how to budget biweekly for the help you need.
If regular budgeting is new to you then head over to my post on budgeting tips for beginners for the best ways to make your budget work immediately.
Related post: How to Create a Family Budget: 7 Key Questions
3. Track your expenses
Planning your families finances and spending it can be two different things. When every penny counts then you need to know that you are spending according to your budget.
If you spend $600 on groceries when you budgeted for $400 then you need to know this. You need to know where your money is going. Not just hope all is going to plan.
The Empower app is perfect for this because it automatically tracks your spending and gives you updates on where you are against the weekly and monthly spend limits you set up. Remember to check out the Empower app here and sign up for your free 14 day trial.
how to live on less income – Reduce Expenses
4. Pay off debt
If you have debt then your monthly repayments are eating into your chances of dropping down to one income. You need to pay off your debt fast, preferably before you transition to a one income household and have lost that 2nd income.
Try living on one income and saving the other to throw at your debt. When you become a one income family, stress about debt repayments is something you don’t need, your budget might not stretch that far.
Related post: How To Stop Spending Money: 12 Tips You Need
5. Cancel non-priority subscriptions
As a low income family, some subscriptions need to become non-priority payments and potentially be cancelled. The lower your expenses are, the higher your success rate for one income family living is.
If a service is no longer a priority to you, make it a priority to cancel. Ask yourself these 3 questions:
- Do I get value from this service (or product)?
- Can I find it cheaper?
- Do I need it or can I do without it for now?
Your FFO should cancel any that fail these questions. An even better way is to get TRIM to do this for you. Trim is a virtual personal assistant that constantly works to save you money. TRIM will help you cancel old subscriptions so you don’t need to.
6. Squeeze monthly Expenses
Many of your monthly expenses are not set in stone, indeed they are ripe for negotiation and reducing. Pull all your recurring bills out, such as household utilities, car insurance and home insurance and shop around to see if you can get them lower.
Remember there is no existing customer loyalty these days, most companies offer better deals to new customers.
It pays to shop around when it comes to home and auto insurance but you don’t need to make multiple calls or plug your details into a dozen websites. Gabi is an online advisor who compares all your insurance options to find you the right policy, in under two minutes.
They compare multiple quotes from 20+ top insurance companies, saving you $720 on average. Click here to get your quote in two minutes and see how much Gabi can save you.
7. Reduce your utility usage
If you can save $10 a month on your utility bills, that’s $10 you don’t need to earn. You can save more money on your bills by doing things just a little differently. Like wearing an extra layer, turning the thermostat down one degree.
For more information on reducing utility bills check out these posts:
8. Change Your Cell/Mobile Phone Plan
Check out your actual data and minutes usage over the past 6 months then take a lookt at plans that give you the same but costs less. You don’t need a brand new phone every year so find a data only package – you’ll save money each month.
9. Cut Cable
I’m not saying get rid (but do feel free if it suits) because we still have cable. But we don’t have the full package and I phone up every year to get a better deal. The only time this is a problem is when the grand-kids come to stay and want the Disney channels, which we don’t have.
10. Keep your housing small
The bigger your house the bigger your mortgage. But also your expenses are that much bigger too.
Never mind the extra time it takes to clean and the cost of more furniture and the knick-knacks you will buy.
When you want to be living on one income in a two income world you need to be willing to buy small, stay small and keep your housing expenses low. The same goes for rented housing. Don’t pay for more rooms than you need.
11. Drop Down To One Car
Cars are expensive to buy and expensive to run. Work out the logistics of dropping to one car. It’s often cheaper to use taxis and Ubers occasionally than have a 2nd car.
Walk short distances rather than use your car. And of course, get rid of your car payment as quickly as you can.
12. Create free entertainment
Have an old fashioned games nights with games from your childhood. Be different and have a games night that does not include a games console. Games such as charades or a traditional board game are not only fun but send you down memory lane.
For more fun friendly family ideas why not check out Debt Free Family’s blog?
reduce grocery spending to live on one income
13. eat at home
Eating out costs much more than the same food made at home, yet it’s one of the easiest habits to fall into. When you are tired and cranky I know you don’t want to start cooking from scratch which is where your freezer meal from your batch cooking sessions will save you (see below).
Cutting back or at least reducing the number of times you are eating out each week can save you hundreds as it’s the biggest chunk of your food bill.
You can find more help on deciding what your budget will be in my post on how much should i spend on groceries each month.
14. meal plan
Meal planning is the mainstay of every frugalista. By planning what meals you will be having for the upcoming week, you know what food you need to buy.
When you know what food to buy you don’t end up throwing extras into your trolley just in case. I like to plan the meals we have without assigning a day, that way it doesn’t feel too restrictive.
If planning so many different recipes each week feels a little overwhelming right now then use the $5 meal plan service.
For just $5 a month you not only get a weekly meal plan, you get a grocery list of all the ingredients you will need to make those meals. That’s less than $1.25 a week to ensure you don’t waste food and have easy, yummy meals to make every night.
15. Go generic
Don’t buy premium brands just because you always have. Generic and value brands cost much less than premium and taste just fine in their own right.
Premium brands cost more partly because the manufacturer needs to recoup all the advertising money they have spent trying to tell us their product is best!
I’ve seen so many blind taste tests where the generic brands beat the premium brands much to the surprise of the testers. You can save up to 300% when you buy your stores own brand or value brand.
16. batch cook
Batch cooking has saved my budget so many times. Who hasn’t come home from work drained
of every ounce of energy? Starting a meal from scratch is not going to happen on those days.
Batch cooking is simply making your normal meals but double or even triple the amount. Chili, spaghetti sauce, tray bakes and soups are perfect for cooking up in a big pot.
Freeze the portions you don’t eat that night and you have a ready meal for another day when you hate the thought of cooking. This is where Myfreezeasy can help, it is a personalized freezer meal plan to suit your time, tastes and budget.
Myfreezeasy meal plans come with videos, shopping lists and simple to follow directions to get your bulk meal prep done in no time at all. It’s all about making 10 meals in just one hour!
Choose the freezer meals you want to prep on the mobile app with their simple drag and drop tool. All the freezer meals are budget friendly recipes.
Cut your grocery spending even further when you join the FREE 7 day Grocery Budget Challenge
Living on low income to Save Money
17. Have an emergency fund
Having a low income means you’ll have less flexibility in your monthly budget and therefore having an emergency fund for, well, emergencies is essential.
Ring fence this money in a savings account for emergency use only. If you’re not convinced then read this post on emergency fund examples of why you need that extra money saved.
18. Save For Big Purchases
Appliances and the like eventually need replacing. You know that so set aside money every month into a replacement appliance and big purchase savings account. Don’t put these purchases on credit and pay interest.
If you were going to pay back credit of $100 a month, save $100 a month instead, ready for your next purchase. Big purchase savings are often called sinking funds.
Different to your emergency fund as sinking funds are for expected expenses whereas your emergency fund is for unexpected expenses.
Sinking funds are essential when you are living on low income. They help you cover the bills that don’t come neatly every month.
19. Budget For Fun Money
I believe everyone needs a little fun money in their lives. Even if it’s only $20. Fun money is your money to do with what you will, no guilt tripping. Mine is usually spent on chocolate!
Without fun money you are much more likely to resent your new life of frugally living on one income and end up having a spending splurge.
20. Create A Savings Habit
Always find a way to save a little every month. Even if it’s just $5, it’s one of the best habits to have. Read my post on why saving money is important and follow the advice there to save something each month.
21. Test run living on one income
If you still have 2 incomes, there’s no reason you cannot live on just the one. Indeed this should be your challenge. Start living on one income and saving the other.
Prove to yourself that it is possible to live off one income and that your finances can cope. Unless you have debt in which case the goal should be to live off one income and use the 2nd one to pay down your debt as fast as possible.
22. Get Rid Of Debt
If you have debt then your monthly repayments are eating into your chances of being successfully in living on a low income.
When you become a one income family, stress about debt repayments is something you don’t need, your budget might not stretch that far.
You need to pay off your debt fast, preferably before you lose that 2nd income. Try living on one income and save more money to throw at your debt.
Grab your FREE copy of the Money Saving Mini Bundle and start organizing your money.
How to live on one income – Be a savvy shopper
23. Have A Clothes Shopping Ban
I bet you have enough clothes in your closets to not need any new clothes for a year. Should you go without new clothes for that whole time? That’s up to you. But why not see how long you can go without buying new clothes?
24. Credit Card Cash Back & Vouchers
Some credit cards pay you in vouchers or cashback when you use them regularly.
As long as you are paying your credit cards off in full every month, then take advantage of these cards. Use them for everything to gain maximum cash.
do it yourself = how to live on one income
25. Do Your Own DIY
Instead of getting someone in to do basic home maintenance like fixing shelves or repainting a room, do it yourself. I bet you can find a YouTube tutorial for any DIY task or maintenance issue you need to tackle.
26. Exchange your skills
Bartering is alive and well in many parts of the country. Exchange a skill of yours with a neighbor and you both save money and keep expenses low.
27. Wash your own car
There are plenty of inexpensive car washes but the cheapest way to wash your vehicle is to do it yourself. If you save $10 every time you wash it yourself then that’s another $10 you don’t need to be earning.
28. Cut your own hair
For many people getting your hair done is a nice treat and activity that takes up a couple of hours. But it also sets you back a few pennies (make that a lot at roughly $50/£40 each time).
Cut your own hair or get your partner or friend to do it for you and you will save a significant sum of money every time. And have fun doing so. YouTube tutorials are your friend here.
why You Might Want to be living on one income
One income families benefits from many things not tied to money. Actively choosing to drop an income means you are prioritizing other parts of your life.
If you’ve never done it before then have a test run of living on one income before you make the transition to a single income budget. A test run can take a little of the stress away as you get used to living on less.
These are just a few of the reasons why people are determined to afford to live on one low income:
Becoming a stay at home parent
Having children puts your money and your whole lifestyle into a different perspective. Living costs have rocketed and staying at home with your child is now a decision that will have a major impact on your financial situation.
Childcare can also take up most of a paycheck so quite often the decision is made for you. You have to be budgetingwith a low income whether you both work or not.
Often these come out of the blue in which case you are straight into survival mode and living on a survival budget. Sometimes, you see this coming so you can start applying for other jobs and cut back on your spending while you still have that 2nd paycheck.
Paying off debt
Whether that’s your mortgage, student loans or other debt, sometimes you want to focus everything on getting rid of it as fast as possible.
It’s never fast when you are talking mortgages and student loans, but putting a whole lot of money towards it definitely speeds up the process.
A big savings goal
Saving up a deposit toward your first house is a big financial goal that many people aspire to achieve. Keeping your living costs low can free up more money for savings.
A whole paycheck siphoned off into savings helps you not only get a bigger house deposit, it means your mortgage costs will be smaller and you can get the best finance deals.
Benefits of living on one income
It is possible to live on a low income and the positive benefits outweigh the changes that you need to make to be successful.
Benefits such as achieving your goal of being a single income family, a stay at home parent or paying off debt.
Being able to survive on less money while your spouse finds another job or retrains is a huge plus. No added debt!
A low income lifestyle gives you financial freedom, you know you are not tied to jobs forever because you know how to save money when you need to.
- You can pay off your mortgage 10 years early, like we did.
- You can retire early, like we did.
- Anything is possible when you set your mind to it.
Just remember those 2 secrets to being successful – your mindset and embracing the lifestyle changes that a low income brings.
how to live On One Income – Do What Works For You
Now you know the secret for how to live on a low income successfully, and you have these 25 tips to point you in the right direction, I am sure you will have frugal living on one income down to a T within a couple of months.
For more help on living on a low income have a read of these posts:
Start taking back control of your money by grabbing your copy of the Money Saving Starter Guide today.
Last Updated on 4th December 2021 by Emma