Melcar Group

Budget Guru

Living on one income

Growing up, I thought that living on one income was the norm and that it would continue to be the norm. However, it is becoming much more common to see both parents working full-time career jobs. Why the shift in family patterns? Of course there are many causes, inflation, personal expectations, technology, credit cards, bills, there are so many causes it’s really hard to pinpoint one “thing” to blame.

It is said that approximately 80% of families living in the United States are now dual income earners.

dual

With that being said, is it possible to live comfortable on just one income in today’s society? An example for this situation could be a spouse going on maternity leave, and once the time is over, the spouse decides to stay home to raise their children. In this situation, there are only two choices possible:

1. Increase income
2. Decrease expenses

Increase Income
1. Government allotment: Depending on your geographical location, your government does supply families with a supplemented amount of money, usually a monthly deposit.

2. Promotion/Raise/New Job: The spouse, who is responsible for the income, can try to generate a raise, go for the promotion, or even job search for a better position. However, this option is not always suited for every family; it really comes down to what is best for the family.

3. Work from home: The spouse who is responsible for staying home to raise the children can work from home on a casual basis. In today’s society there are so many casual jobs that allow parents the freedom to make their own hours and the amount they want to work. For example; who would have ever thought there would actually be a job for dog walkers?? I mean, you buy an animal because you love animals and in doing that you have to take the responsibility of providing for your animal (like a child, you have to feed, love, nurture, and care for your animal). However, people today are just too busy (I guess) to walk their own dog. Being a dog walker, you can set your own hours, how many dogs you want to walk, and doing this you get out of the house, exercise, and peace of mind. Another option is home daycare. A few hours after or before school for the kids down the street can really help supplement your family income. The options really are endless, you just have to do your research and look for options that are available to you in your location.

4. Work part time: The spouse, who left their job to stay home, may be able to work part time while raising children. Getting out of the house is really important when you are raising children because it provides an adult outlet for you, while earning money at the same time.

Decrease Expenses
Random Spending: Generally, the more money you have the more you spend. Without knowledge of your financial situation it is easy to assume that you have more money than you really do. It seems odd, but usually dual income families spend more, and save less. One theory could relate this to parents feeling that they work so hard that they deserve whatever they want. Or, they work so long and therefore will buy their children love (this is not to say you can’t provide love when you work full time). Either way, it is important to decrease your expenses when transitioning from two incomes to one. For example; the random pizza night, or the 35$ teddy bear for no reason will have to be eliminated. When I was growing up, I was rewarded with tangible gifts when something was accomplished which really made me appreciate it much more.

Household expenses: Transition your household to a more energy efficient space. This is done in so many different ways from light bulbs to fridges. Also, be aware of the electricity that you are using up. Don’t have all the lights on in the house, or all the televisions on the same station. Recently it was published that even have appliances plugged in, yet turned off, is using an amount of electricity.

Bank fees/Service charges: It is absolutely amazing to me how much people spend (rather waste) on bank service charges. Do you research, shop around for the best account for your needs. I have seen some individuals throw away 15-30$ per month in service fees. Add this up over one year, which is 180-360 dollars wasted.

Credit Card interest: Eliminate all possible credit debt, starting with the highest interest card first. The interest amounts really add up, and logically speaking it is just putting you further in the hole each month.

Overall Monthly expenses: From food, transportation, entertainment, miscellaneous costs, it is essential that you re-evaluate your monthly budget to determine which accounts you can cut costs from. Read my article on grocery shopping tips to find creative ways to save on your grocery bill.

Overall, I personally feel that it may be challenging to comfortably survive on one income alone, however with knowledge, preparation, and structured planning it is very possible and rewarding.

Advertisements

April 6, 2009 Posted by | Savings, Social Situations | | Leave a comment

Theory # 1

Sometimes we all feel that we never have enough money, or whatever we do have it will never be enough.

A while back, I was having a conversation about money with a close family friend who shared with me the following theory that he follows.

Man or women, we all carry either a wallet or a purse. When you open up your wallet and there is no money in your wallet, psychologically you will feel that you really have no money to your name. When you only see credit cards and other plastics, you will subconsciously believe that you are only in debt with no actual cash. However, if you carry a small amount of money, even 5 dollars you will feel that you have money and automatically your conscious will be more positive. The secret is that if you do have the few odd dollars in your wallet, it is not meant to be spent on an impulse item.

It may be a psychology trick; however I will follow any theory that makes me noticeably happier, or more positive.

 

My Wallet…..  

 wal

 

My Wallet with only 5 dollars in it, plus a few coins as well.

 

walmon

April 6, 2009 Posted by | Personal Financial Theory's | | 2 Comments