Living on a Single Income (3 Minute Debt Break)

Higher interest rates, instability globally and uncertainty in the new year economically… many households look to 2023 as a year of struggling to make it from one financial obligation to the next. This is especially true for single income families. If you are one of thousands of families performing the financial balancing act of trying to get by on a single income, it can be difficult to make financial goals beyond your next payment. The good news is, with a lot of planning and a little bit of compromise, you can build towards a strong financial future. 

The first step in taking control of your finances is to create a detailed budget. A budget will give you a full understanding of how much income is coming in and where your money is going so you can adjust your spending to best meet your needs and goals. If you don’t have a budget, set up a system to track your spending. This will help you base your budget on realistic expenses rather than ‘guestimates.’ The most important thing about creating a budget however, is sticking to it! 

One way to save money is to set up an automatic transfer on payday so that a pre-determined amount of money goes directly into a hard to access savings account before you get a chance to spend it. Having the funds to help you through a financial emergency, a new appliance or a family vacation without going into debt will help reduce your stress. 

Be sure to think about living within your means. Be honest with yourself about what you can afford. Don’t go into debt buying a brand new car, going on a shopping spree or racking up bills on a credit card. A credit card shouldn’t be used as a tool to help finance a life you can't afford. When you splurge on credit, it becomes very difficult to turn back. Credit cards aren't a substitute for saving and budgeting. Try to pay for everything with cash instead of credit. 

Another consideration is to cut down on expenses! Look over your expenses to see what you could do without - for some it may be cable, for others it may be gym memberships. Some of the luxuries of a two-income family probably won’t fit into a single-income budget. Brewing coffee at home rather than stopping each day, basic cell-phone plans rather than expensive ones and eating in rather than frequent dinners out will all be more in line with a single income. 

These tips may at first come across as limitations.  However, your spending plan and budget will allow you to live within your means, avoid the stress of money troubles and in the end, give you the freedom to make smart choices with the money you have as you plan for the future. 

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