If you’ve just had a new baby, or you’re planning on starting a family of your own, then you might be asking yourself what it would take to live on a single income for a while. After all, even if mum does plan on going back to work after the baby is born, she’ll need a little time to recover from childbirth before she can jump right back into action. While most companies do pay for maternity leave, the amount of cash you get from this support isn’t always enough to make ends meet.
Ultimately, for families who are stressed about the concept of living on a single income, the best thing to do is think about how they can budget their way to a healthier financial life. The good news is that it is possible to survive on a single income – all you need to do is understand your budget.
Start by Setting a New Budget
The first thing you need to do when you’re switching to a single-income is change your budget. After all, the amount of money you had to spend when you were bringing in two wages is likely to be a lot larger than what you’ll have after you go down to just one regular income. Even with the help of things like maternity and paternity payments, you’re going to have to re-assess your incoming and outgoing expenses to see what you can realistically afford.
Remember, when you’re writing out your budget, you need to factor in absolutely everything you pay for monthly. This includes common expenses like rent, mortgage, gas, and electricity, as well as less frequent expenses like car MOTs, and television licenses. Personal finance websites such as Readies.co.uk provide lots of information on this.
Create an Emergency Fund
When you’re working on your budget and figuring out where you’ll need to cut back to make ends meet, make sure that you leave some wriggle room in your expenses so that you can devote some of your cash to an emergency fund. While it might be hard to find extra money for savings, most families can find that an emergency fund helps to protect them from a range of potential issues that can become apparent when you’re living on a single income.
After all, what would you do if your boiler suddenly broke down and you needed to pay for a replacement, or if the person still working in your household suddenly lost their job? While your emergency fund might seem like a pain when it’s stopping you from going out for drinks with your friends or splurging on a new gift for the baby, you’ll thank yourself for it later.
Spend Time Instead of Money
If you had plenty of extra money to spend when you had two incomes coming into your household, then you might have paid for things that you can no longer afford when you go down to only one working partner. Often, switching to one income can be a huge lifestyle change, which may mean that you need to cut back on things like eating out at fancy restaurants or getting takeaways. Instead of paying a chef to cook your food for you, spend time learning how to recreate your favourite meals at home.
On the other hand, if one of you isn’t going to be working anymore, this means that you can stop paying for things like child care and help cleaning the house. The money you save on these simple things can go a long way towards improving your financial health.
Look for Other Ways to Make Cash
Finally, if the main reason you’re thinking of switching to a single income is that you want to spend more time at home with the kids, remember that you don’t necessarily have to give up your career in order to do that. If you’re worried about making ends meet, you can always look for more flexible jobs and freelance positions that can help you to earn a little bit of cash on the side, while ensuring that you can still choose a life that follows your schedule.
While freelancing might not bring in as much money as your original job, it could be a great way to keep supplementing your finances after you can no longer apply for maternity or paternity payments. It’s worth checking out this option if you have a skill that you think could make you an attractive part of the contractor or “gig economy”.
This is a collaborative post