7 Tips for Living on One Income

Given the times, I thought it was a good time to talk about finances. I hadn’t planned on talking about finances until September, but here we are.

My husband and I have been living on one income almost since we moved in together. For one reason or another, one of us always seems to be unemployed. It oscillates. Sometimes I’m bringing home the bacon and other times he is. It is never really intentional. We always strive to both be gainfully employed, but we work in a volatile emerging industry, so layoffs and sudden moves are inevitable.

Living on one income isn’t easy, but it is worth the financial security and freedom. Because we planned our lives around only having one income, I could stay home when our baby needed more care. It also opens up a lot of options for us, especially since we save almost all of the second income when we have it.

These tips aren’t always easy to follow. Some of them my not be realistic for you at all. That is okay. Use what you can and discard the rest.

Reduce Big Bills

Ideally, you want all of your recurring bills to be under 50% of your lowest paycheck. That means the first paycheck of the month goes towards bills, and the second goes towards savings and discretionary spending. Getting your bills down that low can be impossibly hard. Most people pay for rent or mortgage, phones, cable, internet, water, gas and electric, and a million other subscriptions that do all kinds of things.

So, first thing to do is separate what bills are actually necessary for you to live and which ones are optional. You need a place to live, a phone, an internet connection, and utilities… and that’s it. Everything else is optional.

The big bill to reduce is usually the “place to live” line item. In America, it is common to max out your home buying/ renting budget to uncomfortable levels. Don’t buy (or rent) more house than you need. When finding a place to live, you also need to factor in school district. Buying a smaller place in a better school district for the same money as the larger place in a worse district will usually save more money in the long run. So buy (or rent) a smaller place and save the difference in cash.

But what if you already own a house? Watch the mortgage rates and see if anything dips to a level that can help you. Losing a point of interest can save you loads every month, especially if refinancing can help you ditch PMI. Trust me, the extra money you free up every month will be worth it.

You can also reduce your phone and internet bills. Shop around for cheaper phone plans. We only pay $40/ month (for two phones) with Google Fi when before we were paying over $120/ month on Verizon. Switching phone plans can save you tons.

Internet can be reduced as well. Consider cutting cable and only going with internet. That can already save you money if you bundle now, but you can also rotate through different promotional offers. We are on a promotional offer that has us paying $40/ month for internet. When it jumps to $80/ month we will secure another promotional deal with a competitor to keep our bill low. We bounce between the two internet providers in our area every two years or so. If you are going to follow a similar plan, be sure to have your own router and modem. Then there is no service fee for setup or a rental fee for their equipment. You just type in an activation code and their system picks you up. No hassle.

Don’t Buy Cheep

If you are trying to save money, it can be counter intuitive to buy more expensive items. But buying quality will save you in the long run.

If you buy a fast fashion coat this year when you need one, you will be replacing it next year when it wears out after one season. Always choose to buy quality.

Buying quality on a budget isn’t always easy. I always recommend you try the second hand market for everything you need first. Most of what we have is second hand, high quality, and resealable. But buying second hand takes time. I will scroll through letgo for things I know I will need soon, and then I jump on it as soon as I see it. Some examples include two antique wooden dressers that I fixed up and are now in use ($10 each), and everything I needed for my daughter in size 2T for $21. I also find things like quartz counter tops for our kitchen ($800) and a kiln we needed for pottery ($500). Acquiring things second hand saves us thousands a year and yields much higher quality pieces. The dressers I got will likely be with us for the next 30 years, and when we are done with them we will probably be able to get money from selling them or just hand them down to the kids.

If you can’t buy something second hand, then buy the more expensive, higher quality item on sale. Sometimes you just need to get things new (underwear anyone?), just wait until it is on sale. Then once you have the item, use it until it is worn out. We do this with shoes. We will buy a brand we know will last a long time, and then wear it until it is dead. Then we typically replace the shoes with the same type and brand. It works.

But what about baby and toddler stuff? Still buy quality on anything that can be reused. You will never be able to resell play dough, but the balance bike? That can make you some money back. And if you are on child one and plan to have more, you don’t want to have to re-buy everything for the next child. Quality onesies will last through multiple children, where cheap ones will fall apart. The second hand market for children’s stuff is vast. You could potentially find some quality toys and clothing, use them for all of your children, and then sell them for what you bought them at.

Quality over quantity. Trust me, buying once beats replacing things every year.

Don’t Pay Fees

ATM fees, late fees, servicing charges, etc. Will eat away at your budget if left unchecked. A little organization will help you avoid all these fees and more. Make sure you pay all your bills on time. If for some reason you pay one late, call and see if they can forgive the fee this one time. Before you pay bills, make sure you have enough in your account to cover the bills and any outstanding payments so you don’t pay overdraft or for a bounced check.

Also avoid paying interest on credit cards by paying them off every month. If you can buy something cash, always do so. Interest eats into your discretionary spending.

Buy, Don’t Rent

We bought a quality router 5 years ago. It cost us $100. The rental fee in our internet if we used the company’s equipment is $5/ month. The router payed for itself in under two years, and we expect it to last for 10. And that calculation doesn’t take into account the $100 servicing fee to hook up the internet we always avoid by having our own equipment and doing it ourselves.

In most cases, if you are buying quality, it is cheaper to buy the item outright and keep it for a long time instead of renting. This is true for anything places like Rent-A-Center offer as well as rental agreements built into contracts and vehicles (cell phones, internet router, etc).

“But I don’t have the cash right now to buy the big ticket item I need. So isn’t renting a better option?” I hear you, and no renting is still a worse option. Before you try to rent something, see if you can get it used. Buying things used is generally much cheaper than buying things new. If that isn’t an option, see if you can buy the thing you need on sale and use a 0% financing type deal. If you pay these before the terms are up you don’t pay any interest, which winds up being significantly cheaper than rent-a-center while still spacing out the payments.

DIY

Often, buying something used and refurbishing it or doing something yourself will cost less than hiring it out. Of course, not everyone is handy, but there are things anyone can do.

You will be surprised how much a coat of paint will refresh an item or room. Reupholstering a chair is generally pretty easy and doesn’t require many tools. You could build a bookcase out of plumbing supplies or cinder blocks and dimensional lumber.

But beyond items, there are things people hire out that you can do yourself for cheap or free. Cleaning your own house can save a lot of money. Mowing your own lawn, doing your own laundry, and cooking your own food can save tons as well.

Of course, if you are planning on going down to one income to take care of the kiddos, then you will also save money on child care.

Now, I’m not going to lie, we spring for lawn care. I simply don’t have time to mow the lawn when the baby is sleeping, and my husband is terribly allergic to everything outside. So we pay $40/ month for someone to mow the lawn and trim everything back. Remember, these are tips that can save you money, you don’t have to follow them.

Get Old School

My grandparents lived through the depression. The way they used things were amazing.
If something wore out, they didn’t throw it out, it was re-purposed into something else. A sheet could be turned into a crib sheet, kitchen rags, wipes for the baby, a tent for the little one to hide in, shop rags, gift ‘paper’ or bags, or anything else they could imagine. A box was turned into a toy before it was discarded. Paper could be reused for art, and art could be used to wrap a gift.

They also re-used food scraps. Vegetable scraps can make very flavorful broth. Just save the scraps in a bag in the freezer and then when you have enough throw it in a pot with some water and simmer until you have a broth. Everything from vegetable peels to rosemary stalks can go into the broth.

And they turned questionable or borderline food items into sauce. Apple cores can be saved up and turned into apple sauce or jam. A too-tart batch of blueberries can become jam or pie. Tomatoes about to turn make good sauces.

Just about every thing they owned served multiple purposes before it graced the trash heap. Remember, anything you don’t have to buy is money saved.

Think Minimal

Minimalism has a tendency to push us to spend less. Not only by buying fewer things, but by requiring less space to store things.

If you declutter and know where everything is, you are less likely to buy a 4th box of crayons because you can’t find any when you need them. If you know where everything is, you only need one of anything. And then, by having less stuff you need less space to store things, so you can buy or rent a smaller place.

Remember, being minimal does not mean you own nothing, it just means you own only those things you love or add value to your life. It also means being careful and judicious of what you bring into your life. Really think about what you need and only spend money on those things. Being judicious about what you buy can reduce your spending and save money.

For more money saving tips, check out Share to Inspire’s 14 Money Saving Tips.

Do you have any tips for living on one income? Let me know in the comments below.