Whether you quit your job, lost your job, had a baby and decided to stay home, or had a divorce or separation, the loss of a second income can be a BIG adjustment. Many families are used to two incomes, and they feel as if it would be almost impossible to survive on only one income.
However, with the right steps and a little extra planning, your family can learn to live on just one income. Consider the following tips and advice to reduce the financial stress of an important household income transition.
Know What You Owe –
The first step to surviving on one income is to sit down and figure out what bills you have. Many families do not realize how many monthly bills they really have, or how much debt that they are carrying. It is important to acknowledge these things so that you are able to work your budget in order to live on only one income. After looking at your monthly expenses, you will need to establish a new budget.
You may have found that your monthly bills are too high. Maybe you are paying for cable services that you don’t use, or paying too much for car insurance. It is important to consider all of your expenses, and see where you can cut down. By reducing your monthly bills, you are allowing for money to be used for other things. You may find that a lot of your second income was used on wasteful things.
Once you take a look at your budget and cut out extra expenses, you can begin to live on one income. With a new budget, you will have a better idea of how much money you really need to survive, and how to use your income wisely. The best part about living within your means is the possibility of savings. If you do acquire a second income again in the future, you can learn to work all of that added income into different savings plans.
Think Outside The Box –
If you are unemployed and are having trouble finding a new job, there are other ways to make money. You may want to consider selling unwanted items that are cluttering your house. Another option is to do freelance work. This could include graphic design, video production, writing, and many other side jobs. If you are hurting for cash, you may need to become creative with your income strategies. While it may not be a traditional full-time job, you can still bring in more money.
How To Deal With Losing Your Job –
If you recently suffered the loss of a job, it can be debilitating to you. Not having the extra pay that you have been used to having can hurt your ego, as well as your wallet.
Here are some things that you can try to help you become more financially (and emotionally) stable during this transitional period:
- Longer hours – Have your spouse or partner ask for longer hours at their job. While not fun, it can make sure that you are still pulling in enough money to cover the necessary expenses. Sometimes, union contracts forbid it, but the occasional boss will let you do it. It’s most definitely worth a try. Bosses like employees who volunteer for more, not less, work. Make sure that you explain your situation to them. Employers are more likely to help you if they know what is going on at home.
- Look for a new job right away – If the budget is tight, consider finding a quick part-time job while you continue to search for a new full-time job. A lot of people do not know how to look for a job that makes them happy and their wallet happy. There are plenty of jobs like that out there; you just have to maybe make some sacrifices in the meantime and take that less-than-ideal job until something better comes around. Don’t ever feel that a job is “beneath you” because there’s always someone else out there who would love to take that job away from you for themselves.
- Cut expenses – Identify what is really costing you a lot of money each month (this is where your budget comes into play) and make it a goal to cut back to save money. Things like monthly subscriptions, cable TV, entertainment, dining out every weekend, and expensive/unnecessary purchases need to go. “Tightening your belt” will make you happy when the bills roll in at the end of the month and you have the money left over to pay them.
Job loss can be managed if you are willing to learn from the minimalist philosophy and learn to live a more frugal lifestyle. If you are unemployed, it’s imperative that you “tame your spending appetite” for the moment. You can’t live like you were living if your income has been eliminated.
Contact A Credit Counseling Agency –
If you are carrying a lot of debt and your income has been reduced from two to one, Advantage CCS can help you figure out a debt management plan that works with your new budget. We can help you work out repayment plans with your creditors and help navigate you through your new financial situation. Our credit counseling is available online, over the telephone, or in person at one of our many locations. If you need help adjusting to your new situation, don’t wait to ask for help. Be proactive and your transition from two incomes to one can be much less stressful.
The tips and advice outlined above are perfect for households in need of downsizing their lifestyle due to the loss of an income, but they also work just as well in a two-earner household too. Big financial changes can be scary, but if you do some research and planning, you can be prepared and you’ll be able to lessen the stress or fears you might have.