8 Financial Hacks For A One-Income Household
Managing your money is tough enough, but for one-income families surviving on a single stream of cash can give you anxiety. Juggling bills, putting together a monthly budget, setting aside an emergency fund, saving for retirements, and paying for anything extra can seem impossible when there is just a single breadwinner.
However, many families across the world who have been in a similar situation prove that it can be done. All you need are the right tools and strategies to reduce stress. Here are eight ways to reduce the anxiety associated with living on a single income and make that paycheck stretch.
1. Create A Budget
This is where you lay the number out. You could use the traditional pen and paper or a spreadsheet to jot down the details of your expenses versus your incomes to create a realistic budget. When it comes to reducing the anxiety around money, you should keep a few guiding principles in mind when coming up with a financial plan for your family.
- Spend less than you earn.
- Maintain savings and rainy-day finds for security.
- Wait for investments to compound and grow.
- Automate monthly bill payments.
When there is only a single source of income, putting up a personal spending plan will help you gain control over their spending, thereby decreasing the feelings of frustration and fear of the unknown.
2. Have An Emergency Fund
For one-income households, setting aside an emergency fund for unexpected expenses can considerably help reduce financial stress. The best thing about this is that you don’t require a large amount of money to get started. In fact, you can start with whatever you have and then work from there.
By creating an emergency fund, you can stay prepared for curveballs that might arise. Furthermore, having extra money in the bank will offer you peace of mind. Ideally, you should set aside enough money to cover three to six months’ expenses.
3. Reduce Costs
Another way to survive on a single income is to reduce costs wherever possible, including services and utilities, transportation, groceries, etc.
The markdown or clearance section at the grocery store is often a great place to save money. For instance, most grocery stores mark down cold cuts, meats, dry goods, cheeses, canned foods, milk, and bread. Markdowns don’t backfire most of the time but ensure you get things that aren’t overly past their prime.
Similarly, using public transport whenever possible, or skipping it altogether when the distance can be covered on foot will help you save more. Furthermore, unplugging electronic appliances when you are not using them is another simple rule for saving money.
4. Seek Help During Difficult Times
It is easy to get overwhelmed by monthly bills. So, when there is an emergency, most people resort to putting the expense on a credit card. While this isn’t necessarily a bad thing if you don’t have an outstanding balance on credit cards, racking up debt every month will have a snowball effect.
So, when in need, your best bet is to seek help from a financial institution or friend that comes with reduced interest and stress. For instance, a payday loan can be a great alternative to getting a traditional loan. You can also share your problems with friends and family.
5. Pay Your Debt
Paying down your debt, whether that is a credit card debt, vehicle loan, or student loan, is the quickest way to get a head start on your goals. Nonetheless, reducing your debt can be challenging. But there are specific strategies that will help you pay your debt asap.
For instance, start by paying off your most expensive loan first. This way, you can reduce your overall interest payment as well as your overall debt.
6. Lower Your Housing Expenses
Lowering your housing expenses can mean various things. For instance, if you rent, you might want to try finding a cheaper place or even downsizing. When it comes to maintenance and repairs, handling them on your own, if possible, will help you reduce your monthly expenses.
Another thing you could do is a no-spend challenge. The idea is simple—you commit to not spending money on wants and other unnecessary expenses for a period of time. You can do no-spend challenges for a day, a week, a month, or even a year.
The main goal here is to limit your spending and figure out what is truly necessary and what’s not.
7. Create A Food Budget
Alongside a common budget, consider creating a food budget or a meal plan. By meal planning ahead, you will get an opportunity to save money, time, and headaches. Planning all your meals in advance will give you an edge when grocery shopping.
You can spend less money on groceries by building your shopping list around your meals and what’s on sale and low-cost staples. Furthermore, you can save yourself from agonizing over what to cook for dinner every night.
Nevertheless, ensure you come up with a realistic food budget and track the sale times in advance. If you surf online, you will be able to find a lot of $5 meal plans.
8. Increase Your Income
If saving money doesn’t work for you, you might want to consider increasing your income. A lot of options are available in the present world when it comes to increasing your income, such as passive income streams.
Passive income jobs will help you improve your earnings without getting further education. The most common passive income streams include affiliate marketing, drop shipping, influencer marketing, etc.
If passive income isn’t an ideal option, then consider asking for a raise or promotions. If time permits, you could even seek part-time work.
Talk it Out
For most people, discussing money feels embarrassing. But sometimes, talking it out with your partner, relative, or a trusted friend can help you immensely. By discussing your concerns, you might be able to hear of new ideas to save money or increase your income. You can also seek assistance from a financial professional to ultimately reframe your relationships with money.
