Some people choose to be single income families while others are forced into the decision. Regardless of how you get there, knowing the right financial moves to make the situation a successful one can be a great help. If it is that you want one parent to stay home and nurture the home and the kids or one family member is laid off because of illness or financial crisis – it doesn’t matter. Once you are a single income family you will find that your needs will be different.
Four Financial Moves to Never Forget
Increase your contributions into your retirement fund
This is not the first thing to come to mind for many people but it is extremely important. You now need to make retirement contributions for both persons – the one that is employed and the one that is not. This is very important since the other partner is not working you will need to provide for their retirement fund. You will have to contribute whatever your spouse used to contribute so that when you get to retirement age you will have adequate income. This will look hard and be hard for many but it will pay off in the long run.
Take out Long
Term Disability and Life Insurance for the person not working. Your non-working partner may not contribute financially to the household but they perform activities that may become an expense if they are no longer able to perform them. So if that stay at home mom dies or becomes disable you will now have to pay for child care etc. Having the appropriate insurance can help you make ends meet if anything happens to your partner who is not working.
This is one of the financial moves that is the hardest. When you become a single income family you will have to start acting like one. So your lifestyle will have to change. Some spending will have to be eliminated and some will have to be reduced. You will have to cut down on things such as eating out, spa visits and anything that is not necessary. You may have to cut down spending at specialty stores and start to purchase in bulk to take advantage of discounted prices. Whatever must be done, take the steps in stride and try to get used to them one at a time so that the transition does not seem overwhelming or daunting. Drastic changes can cause depression which can deteriorate your mental, emotional and physical health.
You could start by banning eating out for a month. Try eating at home and taking meals to work for that entire month and then plan one special dinner out the following month and keep alternating so that you don’t completely go without that nice dinner out. This may even help you to lose a little weight and that is great especially if you are already overweight.
Tackle the Largest Expenses
The biggest expenses for most families are mortgage, car payments, credit card debt and clothing. Tackling these first can give peace of mind so at least you know you will always have a roof over your head, a vehicle to remain mobile, credit for emergency purchase and payments and clothes for you and your family.
If your mortgage is expensive and you have extra space you can rent out a room permanently or temporarily offer a type of bed and breakfast arrangement. If this is not too appealing to you then you can always try downsizing your house.
Likewise if your car payments are too high you can try to purchase a cheaper car. Sell your car and pay it off and purchase a cheaper car with cash so there are no payments to be made if you can manage to go that route. It may feel bad but it is one of the best financial moves to help you save money fast.
Find additional income
This is one of the easier financial moves that can be done by either partners. You can find something temporary or part time to add a bit of income to your bank account. There are a number of jobs that can be done from home these days and even if they don’t rake in the big bucks, once they do create income that is a good place to start.
[Read: Long Term Real Financial Success]
The Bottom Line
These financial moves won’t all work for your situation but all of them are worth trying. You know the old adage – nothing tried, nothing done – try it at least once for a couple months and see how you benefit from each of these tips. If you have friends and other family members that live in single income families don’t be shy, be sure to ask them for tips on surviving on a single income and still maintaining a good quality of life for you, your spouse and your children.