I work full-time and have a small child. My husband and I are thinking of taking a couple of months to live off of one salary, using the second salary to pay off debt, in the hopes to see if we can actually swing living off of one income. This is so exciting and something we have wanted for a long time. Do you have any tips for how to go from two incomes to one? -Jamie
How exciting, Jamie! Here are some thoughts I had:
Get on the Same Page With Your Spouse
If you and your husband are not on the same page financially, it’s going to be hard to really get much traction or to achieve your goal of successfully going from two incomes to one. So before you even attempt to make the transition, sit down and talk openly about where you are financially and where you want to go.
Don’t nag and drag your husband to go along with your plan; put your heads together and find a solution that is a win-win for both of you. This will most likely involve some give and take and compromise, but it will be so worth it.
Make a Game Plan
Once you’re on the same page, dream together about where you want to be a year from now and five years from now. I think your idea to live on one income for a period of time is fantastic!
Think realistically about what sacrifices and lifestyle changes will need to be made in order to make living on one income a possibility. If your plan is to be able to live on one income by this time next year, look at your budget, figure out what you need to cut, and how much you need to save and increase your income in order to make it happen. Having a specific number that you need to save each month will help motivate you to find creative ways to lower your spending and increase your income.
Create and Stick With a Budget
The best thing you can do for your family right now is to get on a written budget. Many times, people don’t have an income problem, they have a spending problem.
Before trying to significantly cut your income, make sure you are being very intentional in how you spend your money and know exactly what you need to make in order to survive. I highly recommend getting a copy of The Total Money Makeover by Dave Ramsey from your library. If you can afford it, I also heartily suggest looking into going through Financial Peace University.
Both of these resources will walk you through how to set up a budget and how to stick with it. And Dave will motivate you and inspire you to dream big, work hard, and get your finances in amazing shape.
Pay Off Your Debt
Make paying off your debt one of your top priorities right now. This will probably mean some significant sacrifices in the short-term — working more hours and living on as little as possible — but the long-term benefits will be amazing.
Figure out how much you have left to pay off, set a realistic time frame for paying it off, and then divide the amount by the time frame to come up with the specific number you need to be paying off each month and week in order to hit your goal. When you break your goals down into bite-sized pieces like this, it makes them much more doable. And it also will motivate you to keep making short-term sacrifices for the long-term benefits.
What advice and suggestions do the rest of you have for Jamie?