Mommies Magazine

Living on One Income Part 1

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Posted on 24. Feb, 2008 by The Mommy Circle in Life As A Mom

This is part one of two and is a topic that I’m sure I’m not alone in dealing with.

Setting a Clear Budget

There are lots of reasons why families have to live on one income, a new baby, single parent, husband loses his job or simply because one of you wants to spend more time with your children. Whatever your situation is, living on one income can mean it’s time to cut back, or it can mean that now is the opportunity to slice your spending in half by making a few clever budget changes.

Review the basics: look at your cash flow, what money is coming in and what money is going out. The first part is easy, list every penny of income you receive on a regular basis every month. This might be before you give up a second income to see if you can afford it, or this may be your single income that you are living on now.

Then comes the slightly harder part of listing everything that you are committed to spending on every month, this includes your mortgage, car payments, loans, utility bills like electricity, cable and water. Make a full list of everything that you absolutely must pay for every month.

You should add a realistic amount for food and other essentials such as diapers for your little ones or any other costs that you have to pay on a regular basis. These are your essential monthly costs.

Then take away your monthly essential expenses from your monthly income. The difference between the two is how much you have to spend on everything else. Of course this amount might actually be negative and this is actually more often the situation for many families where you suddenly realize you can’t afford your living.

But don’t worry because there are lots of things you can do to reduce costs. First review the items you made for you essential monthly costs.

We all usually have a long list of essential monthly costs so if you can reduce each one by ten dollars here and twenty dollars there it will eventually all add up to make a significant difference.

Tags: budget, single income, tips on saving money