Financial Tips For Living In A One-Income Household

Living in a one-income household is stressful. There is no denying that. There is not a lot of room for extra spending or financial missteps. Millions of people have lost their jobs because of the ongoing pandemic. This has left millions of families to survive on a one-income household for the first time--something very hard to do, especially if you aren’t used to it. 

Although there has been a huge spike in unemployment, we are all still living in the 21st century and the cost of necessities like groceries and rent just keeps increasing, making it harder than ever if you live in a one-income household. Here are some money tips that you can implement in order to make life a little bit easier:

1. Get paid every time you buy toilet paper

Groceries are also going to take up a good portion of your budget--even with good planning. Everyone has to eat so you might as well earn some money back whenever you go to the grocery store. With the app Fetch Rewards, you can get gift cards for buying toilet paper and more than 250 other items at the store. After downloading the app, take a picture of your receipt to show the app that you’ve purchased one of the brand items that are listed on Fetch. You’ll then earn gift cards to places like Amazon or Walmart.

2. Start meal planning

As said above, groceries will always be a large part of your budget. Try meal prepping for the week ahead in order to save money. This doesn’t just mean making a shopping list. It helps you use what you buy in order to prevent food and money wate. It also helps prevent on from spending extra money on lunches or take-out. Figure out how many meals you eat per week and how many people there are in your household. Next, figure out how much food you will need to make these meals until the next time you go grocery shopping. If you find yourself buying the same items often, make sure to stock up on them when they go on sale. Stocking up on sale items can also help you freeze meals for the future. 

3. Subtract $540 a year from your car insurance

You should make sure to check car insurance prices every six months or so as it can save you a lot of money. With a website called Insure.com, you can easily compare car insurance prices by entering your zip code and age. People have saved an average of $540 a year with this website. 

4. Don’t overpay for stuff online

Sites such as Walmart and Amazon will rip you off sometimes Make sure to compare prices to other websites to see if your item is available at a cheaper price on another site. You can also come across coupon codes, price-drop alerts, and the item’s price history by doing this type of research. This has saved people $160 million in the past year. 

5. Make $225 by just watching the news

People have been glued to the news more than usual this past year. There are research companies that will pay you to watch the news. All you have to do is sign up for InboxDollars and you will be shown short news clips that you can choose from every day. They will then ask a few questions and the site will pay you every month. You can even make up to $225 a month. The site has already paid its users more than $56 million

6. Stop paying your credit card company

Credit card debt is the most expensive debt and your credit card company often gets people with their high-interest rates. However, with a website called AmOne, you can help your situation. If you owe your company $50,000 or less, AmOne will match you with a low-interest loan that you can use to pay off every one of your balances. You will then only have one bill to pay every month as personal loans have lower interest rates. AmOne also keeps your information secure and confidential and has gotten an A+ rating from the Better Business Bureau. 

7. Leave your dependents up to $1 million

Many of us don’t have trust funds. However, you can still leave your family up to $1 million in life insurance. With a company called Bestow, you can pay as little as $16 a month. Before signing up fully with this company you can also get a free quote to see how much life insurance you can leave your loved ones. 

8. Have an emergency fund

Having an emergency fund can help decrease your stress about income, even if you don't live in a one-income household. It can help protect you against unforeseen expenses like medical costs or an unexpected repair. Your fund should contain enough money to get you through six to nine months of living expenses. Make sure to set up a direct deposit in order to allocate a percentage of your paycheck to this fund. It helps to ensure that money will go towards the fund and decreases your temptation of spending this money on other things. 

9. Consider tax withholding

Make sure to look at your income tax withholding to see if it can be adjusted because of your smaller annual income. This could help you increase your allowances because you’ll have less money withheld from your paycheck every month. If you aren’t sure if your withholding needs to be adjusted, you can contact the IRS directly or consult a tax professional. After doing so, be sure to adjust your budget if withholding taxes change your net income. 

10. Spend time, not money

Even though your family might not have as much money right now, there will most likely be more time to devote to spending quality time with your loved ones. If in the past you’ve hired help or relied on takeout, this might no longer be necessary. However, you might not want to disconnect entirely from the working world. It’s smart to stay professionally engaged if you plan on returning to the workforce in the future. Freelance or consulting work can help you network and bring in extra cash. 

11. Determine how you’re going to manage finances

Many one-income households decide that whoever is not working and has more time should handle money matters while other people have both people manage finances. You will want to review your bank accounts or joint accounts so it’s easier to track finances. Direct deposit into your savings account instead of checking accounts will make it easier to save money. However, whatever way you choose, it is important that non-working partners have access to the accounts. 

Following these eleven steps can help reduce stress if you live in a one-income household, especially in a time where you might be earning less money than at other times. Transitioning to living on a single income can be intimidating, but with some strategic planning, it is definitely possible. 

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Resources

https://bettermoneyhabits.bankofamerica.com/en/saving-budgeting/living-on-one-income

https://www.thepennyhoarder.com/budgeting/secrets-one-income/

How to Determine Needs and Wants While Planning Out Your Monthly Budget

I’m sure many have heard of the 50/30/20 calculator as a way to budget out one’s monthly income after taxes have been deducted. Fifty percent goes to needs, thirty percent goes to wants, and twenty percent goes to repayments and savings. Many struggles, however, is figuring out what kinds of expenses should or shouldn’t fall under each of these three categories. Here is a simple way to start:

Necessities (50%):

- Food

- Rent

- Transportation

- Utilities (if not already included in rent)

- Insurance

- Necessary loan payments

Wants (30%):

Anything that is not essential for living and working

- Monthly subscriptions (Netflix, Hulu, Spotify, Disney+, you get the picture)

- Travel...not taking that trip to Florida won’t kill you

- Entertainment

- Eating Out (this includes coffee)

Savings (20%): The category most people view as unnecessary too much of the time. Emergencies and the future do exist. You want to be prepared for them. Money is savings go toward:

- An emergency fund

- A retirement fund --either through a 401k or a personal fund

- Paying off debt--high-interest rates will kill you if you let too many months go by

Ask yourself if you really need to buy that iced coffee each day for $5+ when you can just make coffee at home for around 20 cents a cup. Instead of eating out with friends and going to dinner or brunch (or eating outside/ordering at this time), cook homemade meals together. It saves money and gives you a fun activity to do. This doesn’t mean you have to be totally frugal and deny yourself a fun time. Treating yourself every once in a while won’t break the bank. However, you probably don’t need that extra cocktail or a new sweater. Putting that money in savings or investment will go a lot further. 

https://www.thebalance.com/how-to-make-a-budget-1289587

https://www.thebalance.com/creating-a-monthly-budget-316118

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