There’s numerous reasons for people wanting or needing to live on one income.
Maybe you’re pregnant or recently had a baby and are wanting to figure out how to live on one income so you or your spouse can be a stay at home parent.
Similarly, if you have a child or multiple children in daycare, you may be considering transitioning to living on one income as a family mainly to save on childcare costs.
Maybe you or your spouse want to go back to school and won’t be able to work for a certain amount of time.
You may be in a situation such as divorce or illness and you’re unexpectedly forced to figure out how to live on one income.
Whatever your specific, unique circumstances may be that are pointing you towards making the switch to living as a single income household, I have several tips to help you achieve this.
These tried and true tips, tricks, and strategies have been put to the test multiple times for our family over the years.
I can relate to many of the above reasons for wanting or needing to learn how to live on one income.
I’ve been a new mom dreading going back to work after maternity leave and wondering if me or my husband could ever afford to be a stay at home parent. Spoiler alert: We could and we did.
When I decided to go back to nursing school with a new baby, we had to learn how to live on one income due to me only working a minimum of one shift per week.
And yet again when I had our second baby girl, a new dream was also born in my heart.
I made it a serious goal to someday be able to bring my husband home from his job he didn’t enjoy so he could be a stay at home parent to our girls.
I knew this meant we would have to implement some serious strategies in our finances to be able to afford living on one income and support a family.
Spoiler alert #2: We did. Pretty much exactly a year after I set the goal of bringing my husband home from work before the age of 30, we took the leap and made the switch to living as a one income household.
My husband quit his job that he hated in management and came home to take care of our babies full time.
I went from working one night a week as a Mom Baby Nurse to working full time 3 nights a week.
Not only did this allow us to have significantly more time together as a family. We also learned so many valuable lessons and built positive financial habits on our journey towards living on one income.
We still implement and benefit from these financial strategies many months into living on only my salary as a nurse.
These 13 actionable tips are tried and true and can help you learn how to live on one income.
Tip #1: Establish your big “WHY” for wanting or needing to live on one income.
This tip isn’t #1 by accident. I purposefully placed this as the top tip for living on one income because, like with any major goal in life, it’s vital to have a why that drives you.
When you’re several months into working towards a goal, motivation starts to wane.
What once may have seemed like such an achievable dream, may now not even seem attainable anymore.
It’s easy to start to question why you’re even working towards that goal in the first place. This is when most people tend to give up on their goals and dreams.
That’s why it’s so imperative to establish a rock solid why that you’re confident will sustain that fire inside you to keep plugging away and working towards that goal.
In the instance of wanting to transition to living on one income, maybe your why is to be able to be a stay at home parent.
Maybe you simply want more time freedom and flexibility that can only come when you or your spouse aren’t working full time.
Whatever you decide to make your why, make it one that will continue to drive you and push you forward when the going inevitably gets tough.
Tip #2: Start by living on one income and saving the other.
If you’re currently living in a two income household and want to make the transition to living on one, start by saving one of those streams of income.
This is exactly what my husband and I started doing when I was pregnant with our first daughter.
I was pregnant in nursing school and working part time as a Mom Baby Nursing Assistant. My paychecks were pretty modest, but it definitely still took a ton of willpower to save that income.
But I had a big why that drove me to continue to use my income to build up our savings. I knew that after I had our baby, we would need to have a decent amount of savings built up for my maternity leave.
I also knew that I’d be going back to nursing school after taking a semester off to have a baby. With school and a baby, I didn’t know if I’d still be able to continue to keep working even part time. So it was a no brainer for me to be as frugal as possible and save my income while we lived on my husband’s.
After proving to ourselves that we could live on one income while saving the other, it kind of just became a way of life for us.
Once I graduated nursing school when our daughter was a year old, I did start working full time again. Although this significantly increased our monthly income, we still continued to live only on my husband’s salary.
This allowed us to quickly pay off the rest of our car payments and save for a down payment on a house within just a few months.
Tip #3: List your expenses and slash them as much as possible.
If you’re wanting to live on less, it’s important to make your expenses be less. One of the best ways to do that is to list all of your recurring monthly expenses out and try to cut them down as low as you can.
This may mean cutting out cable or unused streaming services.
You may need to be realistic about your car payment and see if it would be worth it for you to trade it in for something cheaper.
Likewise, downsizing your house could even be a possibility.
Living on one income of course doesn’t always have to require these drastic of lifestyle changes (it didn’t for us). But depending on your unique situation, it may need to be a possibility you visit.
Tip #4: Create a budget and stick to it.
This tip is ESSENTIAL for getting a firm grasp on your finances and making your money work for you rather than the other way around.
Ever since I graduated nursing school and we started saving my full time income, I’ve used the Every Dollar app by Ramsey Solutions.
This app has allowed me to create a monthly budget and closely track all of our expenses. What you track grows and money tends to disappear faster than you can imagine if every dollar doesn’t have a name.
Tip #5: Eliminate debt to be able to live on one income.
When you’re trying to lower your overall monthly expenses in order to be able to live on one income, it’s important to eliminate as much of your debt as possible.
Debt = monthly payments. It really is as simple as that. And not only are you making payments every month toward those debts, you’re often paying significantly more over time in interest on things that you’re in debt for.
Up until very recently when we had to buy a new vehicle to accommodate having a third baby, we had both of our vehicles paid off. That was huge in helping us be able to comfortably live on one income.
I can tell you with full confidence that now going from not having to make payments on a car, to having to make them monthly again, they hurt.
So we will be putting this advice to practice once again and paying off that car loan as quickly as possible.
Tip #6: Build an emergency fund to help you live on one income.
Having an emergency fund is so valuable any time you are trying to get a hold on your finances.
A $1,000 emergency fund is a great start while you’re working towards paying off all your debt.
After that, you’ll want to save at least 3-6 months worth of living expenses before making the switch to living on one income.
This will give you so much peace of mind in knowing that you have something to fall back on for awhile if things end up being a little, or a lot, tighter financially than you thought.
Tip #7: Supplement your income with a side hustle while trying to live on one income.
Whether you’re working towards paying off debt, trying to beef up your savings, or even if you’ve already made the switch to living on one income, working a side hustle to supplement your income is always a good idea.
This is exactly what we did when I cut my hours back down to part time again when I had our second daughter and my husband was still working.
In fact, we actually both started our own side businesses at that time. This allowed us to each turn our hobbies into cash flow.
There’s countless options available for you to start a side hustle. Maybe you have a certain talent or skill that can be turned into a side business.
Doing deliveries for Door Dash or UberEats is a great option and is actually what my husband and brother in law have done.
Starting up a direct sales business or even starting a blog are also great options for supplementing your income with a side gig.
Tip #8: Really double down on what matters most to you.
Like the first tip, this one is crucial in staying focused and motivated when working towards living on one income.
Our society has made “Keeping Up With The Joneses” literally just a way of life now. With social media especially.
It’s so hard not to find yourself comparing your life, income, experiences or material possessions to others.
That’s why it’s extremely important to have some honest conversations with yourself and your spouse about what matters most to you in life.
If you know you’re someone who just really values having the latest, most expensive tech toys, cars, clothes, etc then you may have to make some additional sacrifices while living on a single income.
This is not at all to say that you can’t still have nice things with one income. You absolutely can. But it just may mean sacrificing in some other areas to find the right balance for you.
Time is a currency.
This is a phrase that my husband and I used a lot when making the switch to him being a stay at home Dad and me going back to work full time.
For us, more time with our kids and together as a family was more valuable than just about anything else during this phase of life when our babies are little.
We know that while living on one income, that may mean we have to make a few sacrifices here and there.
But this time is so short and fleeting.
Before we know it, all 3 of our girls will be in school.
At that point if my husband chooses to go back to work full time and we go back to being a two income household, we won’t have to make any of those financial sacrifices anymore.
But in the meantime, it’s more than worth it for us.
It’s all about giving up what small things you want now, for what you want most in the long run.
Tip #9: When buying a house or car on one income, get the lowest interest rate possible.
I’m a huge fan of staying out of debt as much as possible. Especially when you’re trying to live on one income. But sometimes financing can’t be avoided.
MOST people don’t have the amount of savings built up to buy a house, or even a car, in cash. So those 2 things are most commonly financed.
The downside of being in debt and having to finance and make monthly payments on anything is accruing interest.
That’s why it’s so important to make sure that when buying a home or vehicle, you try to get as low of an interest rate as possible.
With the current economic situation we are in, this isn’t as easy as it was even just a couple years ago.
We bought our first home in April of 2020 right before the housing market skyrocketed.
Because of that timing, we were able to get a really low fixed interest rate that is almost unheard of now just a couple years later.
While some of that was partly just lucky timing, a lot of it was also due to planning that timing on our part.
Likewise, we financed a new vehicle at the end of August 2022. Not a great time economically for buying a car. But with our third baby on the way, we needed more seats for all these dang kids!
We were quoted several interest rates that were all simply way higher than we were comfortable agreeing to.
Needless to say, I picked up my purse and my toddler and walked my pregnant butt right out of that dealership.
Twice actually!
I almost got to the highway when the salesman called me and asked how an interest rate from my own credit union of LESS THAN HALF of what he had originally quoted me sounded.
I told him that now we could talk.
Sometimes it takes some negotiation.
But getting the lowest interest rate you can when buying a house or car is vital in keeping those overall monthly payments down.
Tip #10: If you want to live on a single income, you have to learn to live within your means.
Living within your means simply means that you’re not spending more than you’re making.
I would actually argue that it’s best to live SIGNIFICANTLY below your means while working towards a goal of living off of one income.
Again, another example of this from personal experience was when we bought our first home.
Since at that time we were a two income household, we were of course approved for a loan much higher than what we actually bought our house for.
I’m talking by like three times as much.
Many people think that simply because they are approved for a certain loan amount, that they should actually finance a home loan anywhere near the ballpark of that figure.
This is a big financial mistake and almost a guaranteed way of becoming “house poor”.
While that may sound harsh, it’s simply a fact of life that something almost always comes up.
This seems to be especially true with home ownership. Even if you buy a brand new build, you will still want to allow for things breaking and needing to be serviced or replaced.
Apart from things potentially going wrong with the house itself, life also inevitably has a way of happening, doesn’t it?
Sure, you or your spouse may get annual raises that will increase your income and help you better afford a larger house payment.
But from experience, the mortgage itself can, and most likely will, increase as well. Even with a fixed interest rate, due to fluctuations in property taxes.
And then what if, like in our situation literally the exact month we bought our first home, you get pregnant?
As an OB nurse and mom of now almost 3, if there’s one thing I know to be more unpredictable than just about anything, it’s pregnancy and birth.
I had to be put on bed rest with our first daughter from 30 weeks on. This put a damper on my plans of saving up our rainy day emergency fund of 3-6 months of expenses.
With our second daughter, I was extremely sick with hyperemesis and eventually had to go from working as a full time Nurse down to part time.
This cut our income almost in half.
Although these situations of course came along with their own level of stress, we never necessarily felt a huge financial strain due to the fact that we made it a point to live within our means and had purchased a home for significantly less than what we qualified for.
Making living below your means a way of life takes some grit and a lot of self discipline.
But it reaps continual rewards and greatly helps to prevent you from falling into financial pits.
Tip #11: Start cooking meals at home more and save as much as possible on buying groceries.
It’s no secret that the cost of food is rising. Eating out a lot is almost a guaranteed way to exceed your monthly food budget.
To offset this, I recommend setting a couple different food budgets.
One that is a realistic grocery budget. And one for eating out. Then try your best to stick to it every time you buy groceries or eat take out.
Admittedly, like most people, food is the one area our household REALLY struggles with staying within our budget.
But I definitely notice that anytime I stay disciplined with meal planning and making the majority of our meals at home, we spend significantly less than times when I fall off this strategy.
This is definitely one of those areas where if you fail to plan, then you pretty much plan to fail when it comes to staying within your food budget.
Many people swear by shopping at ALDI first and then getting whatever else is leftover on their grocery list elsewhere.
While I have absolutely no doubt that this strategy has to be saving people money on their groceries due to its popularity, I personally have actually never really implemented this strategy.
For me personally, especially since having babies and after the pandemic as well, grocery pick up and delivery has been a huge life line for me.
In SOME instances, convenience and saving time outweighs saving a few bucks. And this is definitely the case for me personally when it comes to grocery shopping.
And like I said, we do often fail to meet our minimum food budget each month. But that’s typically due to eating too much takeout.
I personally find that I actually spend significantly less when I shop online as opposed to browsing the isles and having all the options right there to entice me to make unnecessary purchases.
I do plan to try to really start implementing some more food saving strategies soon to lower our grocery budget, so stay tuned for further tips in the near future for how to save money on groceries.
Tip #12: If you’re married and haven’t yet combined your incomes, do that before transitioning to living off of one income.
For some couples, having separate bank accounts makes sense and works for them.
But for the majority of people I’ve talked to and from what I’ve studied on this topic, that isn’t the case for the MAJORITY of people.
Combining incomes may be a little scary for some couples for multiple reasons. This is why I actually personally suggest combining incomes BEFORE you ever get married.
I know that’s definitely controversial. But I personally saw it work really well for my husband and I to combine our incomes while we were engaged.
This gave each of us insight into the other’s spending and saving habits and allowed us to establish financial habits TOGETHER in our early 20’s and to work out any kinks or fights about finances before we got married.
Again, I know that’s a very debatable topic that people can really go up in arms about.
But for sure once you’re married, combining your incomes will give you each more buying and saving power.
This will also help you to be on the same team when it comes to your finances.
Which leads me to the last and final tip for how to live on one income.
Tip #13: Have some honest conversations with your partner about how living on one income could impact your relationship dynamics.
If you’re a single parent living on one income, this section may not apply to you.
But for those who are married or living together and making the transition from living as a two income household down to one, it’s extremely important to have several very open and honest conversations BEFORE taking that leap.
It’s important to talk about and establish if one of you will be more “in control” of budgeting your finances.
And to also make sure that being “in control” doesn’t mean being CONTROLLING.
The main thing is being open and honest about the inflow and outflow of your finances.
For some, each person having their own personal spending allowances may be helpful.
But the key is communicating and being on the same page when it comes to budgeting.
So again, having joint banking accounts that you each have access to is imperative to ensuring that making the switch to living on one income won’t become a point of contention between you and your spouse.
Thank you for reading this guide for how to live on one income!
I hope that these tips that our family has put into practice many times over the years will be helpful for you on your journey of living on one income.
Leave a comment below of any additional tips you may have to help other readers with this topic!
And as always, feel free to share this post and refer back to in it the future!