Whether you are having a baby or trying to stay home for other reasons, going to one income to two is hard. How do you live on one income? Is it even possible?
When I had my first child I firmly said no. It wasn’t possible for us. We needed all of our money to survive.
Boy was I wrong.
We’re now living as a family of four on LESS income than we had with our first child. My husband works, and I stay home with the kids.
So how did we make this happen? I’m going to be brutally honest with you. Dedication and pure desperation played a MASSIVE role in our success.
This post contains affiliate links, the boring details of that is here.
Making a plan to live on one income
So before I was even pregnant my husband and I were having conversations about how we would manage a second child financially.
Daycare for two kids would come out to just $500 less than what I was being paid each month. Was working full time worth $500 a month to me?
NO. No it was not.
We looked at our finances and decided that if we could pay off both of our cars then we could probably just scrape by.
So how do you decide what your scrape by income would be?
- Make a budget
- Cut out every ‘extra’ cost you can
- Create a plan to pay off debt
- Find a side hustle if you need to
Do you want even more guidance on how to go from two incomes to one?
Check out my brand new course Two Incomes to One: A Complete Guide.
This is exactly how we did it and will answer those questions you KNOW you will have along the way.
How to make a budget for one income
Do you have a budget now? If not don’t worry. You can absolutely make one.
Check out this entire post on how to make a budget here.
When you are customizing your budget to fit on one income you need to be as lean as humanly possible.
Go through ALL your current expenses and put them into categories. You need to know what you are spending now to know what you can logically make as goals for your one-income budget.
We currently use You Need A Budget to track all of our expenses and put them in categories. You can get a free 34 day trial for YNAB here.
Or you can also use a free tool like Mint!
Once you know what you are spending, create realistic goals for your categories each month.
Add them all up and that is your bottom line income need. HOPEFULLY, we can take down this number even more as we find ways to save, and as you get better at money-saving ways.
It honestly does take practice to hone your money-saving skills.
Cutting out every extra cost in your budget
Now you’re going to look at your budget again. Yep, the one you JUST made.
Is there anything in there that is optional?
Are there any subscriptions you can cancel? Cable seems important but Hulu is only $6 a month. Snag a free week of Hulu right here.
Here are some things you can look at cutting out:
- Buying coffee ( I love THIS coffee maker with milk frother instead)
- Subscription boxes
- Entertainment (opt for FREE options instead of paid!)
- Drop cable (and get Hulu instead)
In addition to cutting things out of your budget, you can also try and find ways to reduce the costs of things that you actually have to have
Some things you can reduce the cost of:
- Groceries: Try to meal plan! This is a step that saved us over $400 a month. (See below where I will give you a one-month meal plan for free that will only cost you less than $150 at the grocery store)
- Shop around for new cell phone plans, internet plans, and insurance plans
- Reduce car payment costs by selling your car for a cheaper one
- Reduce mortgage payment costs by selling your home for a cheaper one (you must weight the cost of moving in this though!)
We did ALL of these things to reduce debt and become more financially independent. Little by little we were able to afford to be on one income.
I break down my entire process for saving a ton of money on food and meal planning in my class Food Budget Overhaul.
You can find the class here!
Related posts:
- 10 Ways to live more frugal right now
- 14 Easy ways to save money
Create a plan to pay off debt
This is one step that made a massive difference in us being able to live off of one income comfortably. As you are saving money, get yourself in a better situation and start paying off debt early!
The fewer payments you are required to make each month the lower your income has to be to survive. It’s just that simple.
You can see the post on how we paid off $32000 of debt in one year here.
So how do you pay off debt the SMART way? We followed Dave Ramsey’s program and modified it a little bit to help us stay motivated.
Basically, you use the snowball method to pay off each debt you have from smallest to biggest. So you take ANY extra money you have at the end of the month and pay extra on your smallest debt.
Then once you pay off that debt, you can use the money you used to pay on that smallest debt onto another slightly bigger debt.
Then it snowballs.
We changed this method up a bit in between and give ourselves a reward after we paid off each debt. It ranged from small things like a nice dinner out all the way up to go to Disney.
These little perks gave us motivation and let us let off some steam in between each debt.
We knew from our budget we made prior what number we would have to get our debt down to actually be able to go down to one income.
We used a program called Undebt.it to map out our plan and we knew by a certain date we could start trying for baby number two!
Find a side hustle if you need to
It feels like just about everyone has a side hustle these days. But finding a profitable side hustle can be HARD.
Between MLM’s, blogs, Etsy shops, and Uber people are trying every which way to make a little extra money. So which should you do?
Personally, I think every person has something different that will work for them. I’ve heard of mom’s making side money with an MLM (multi level marketing companies like Mary Kay), and I know for a fact that blogging can be profitable as well.
I do now make money blogging on the side, but for the last year, we have lived on less than $2500 a month. Some months were less than $2000.
In the last two months, my blog has started to replace my former full time income, so we are coming out of that stage in our journey.
You can find my post on how to start a blog here.
So what side hustle is perfect for you? That’s something only you can answer! If you don’t like putting yourself out there on social media and in real life, don’t do an MLM. If you like more guaranteed money, go with something like Uber or Instacart!
There are a million options for this, and I am SURE that there is one out there for you.
With kids at home my time for my side hustle is in nap times, bedtimes, and weekends when my hubby watches the kids. I really only get to work about 10 hours a week.
You need to acknowledge how much time you have to do something before you jump into it. Know that you may not grow as fast as someone who has forty hours a week to burn. But you can ABSOLUTELY still do it.
I find that how we manage our time in our side hustles means everything. As a mom, creating habits and processes that optimize your time is crucial. I’ve loved books like the 12 Week Year and Atomic Habits because they have helped me increase my productivity without taking away time from my children.
You can find a whole post on what side hustles are out there here!
Are you ready to take the leap of living on one income?
Check out my entire course that leads you through going from two incomes to one without constantly being stressed about money!
Ultimately we took a leap of faith in ourselves and it worked. Are you ready for that? I’m positive you can do it!
Have any questions? Let me know in the comments below!
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