Many families enjoy the security of a two-income household. Many working parents admit that they would rather spend more time at home raising their kids. In the current economy, it is easy to see why. Having at least one parent at home is preferable in certain situations, although they will be losing one income. Transitioning from two incomes back to one is a big change but can be accomplished if you have a plan.
Transitioning from two incomes down to one can seem a little overwhelming, but if you follow these tips for living on one income, you’ll make the transition smooth and easy.
Have a Plan
Having a plan ahead of time relieves stress and worry about what will happen when the change occurs. If you have a budget based on a single income, it will be easier to see how the money will be spent and help you worry less.
Put Money in a Savings Account
Announcing your departure and heading off without any savings in the bank is a recipe for disaster. Financial experts recommend having at least 6 – 12 months of income put aside in savings to live on in the event of an emergency.
Pay Off as Many Bills as You Can
It will be easier to make the transition to one income by not having car payments and credit card bills looming overhead. It is a good idea to pay down the largest bills first, and then the smaller ones.
Eliminate Unnecessary Expenses
Living on one income means cutting back on expenses to stay within the budget. There are free sources of entertainment that can be utilized while cutting out cable and trips to the movies.
Find Alternative Health Care Coverage
Leaving a job means losing the health benefits from that position. Research insurance companies and find one with low-cost premiums that cover the whole family.
Practice Living on One Income Before You Decide
If the thought of losing half your income is worrisome, practice it for a month before making the transition. You can use one income to pay the household bills and buy groceries and save the second income in the bank.
Making the switch to a single income can be made easier by planning and covering the most important things.