How to Shift and Live on One Income
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One of the biggest game changers for us was learning to live on one income. I'll share the strategies we used to dump our debts while still having fun!
If I had to nail down one thing that has been a game changer for us, both financially and in quality of life, it is basing our spending on one income.
For a while I used to have as a tagline here, ‘Learn to Live on One Income and Have Fun with the Second'.
I felt like it was a succinct way to capture our ‘how' of our financial system as a couple.
It works really well for us not only on the financial side with paying off over $30,000 of debt, buying a home, and saving for retirement, but it's given us more options in our lives.
Why We Started Living Off Of One Income
I'd love to say that we began our marriage with some grand plan of how we were going retire early or become financially independent.
But we didn't.
The whole idea of keeping our essential expenses under one income was simple. It was a necessity.
I had just started an internship. It had pretty good pay for the area but it was scheduled for one semester.
We had no idea if I was going to be able to stay there so we decided the smart thing to do was base our bills off of my husband's income (a whopping $33,000) and then use my income extra savings, debt payments, and date nights (newlywed priorities).
Right off the bat, we had a situation that tested our resolve – our apartment.
Keeping Our Monthly Expenses in Check
We had quite a wish-list for our first apartment. We wanted a place that would be a relatively easy commute for his job and my classes
Two options jumped out at us. One was a lovely apartment in a new building that had everything on our list and more.
We were in walking distance of several hip restaurants, movie theater, and a bookstore (my favorite spot!).
It's the kind of place, where you can come home, head downstairs, and spend the evening at the local spots.
The downside? It was over our self imposed budget by a few hundred.
Now if we used my income, we could swing it and be okay.
The other contender was a cute one bedroom that was closer to the university, but a longer commute for my husband.
The quadplex was owned by a sweet elderly couple with their son managing the property.
It was smaller, older appliances (think the stove was mini-sized), and the neighborhood wasn't fancy like the other apartment's, but it was across the street from the bay.
And well within our budget.
New apartment with the bells and whistles that would require both our incomes or the slightly run down
We went with the beach side apartment.
The Freedom of Living on One Income
Honestly, we did have some people think our choice was a bit crazy, but it really set the tone for our finances together.
Using this mindset has helped us to grow the gap between what we earn and what we spend.
It's also given us more options.
As I approached graduation, I was offered a job in Raleigh. That meant a move and my husband having to find work.
But because we had simplified things, we had the savings to make the move.
It took some time, but my husband found a job he enjoys and that pays well. In fact, because we moved his income has grown significantly.
If we had lived close to the edge with our budget, I'm not sure we've taken the job.
How to Shift Towards Living on One Income
I'd love to say it's a cinch to live on one income, but that's not the case for most couples.
There's work and an adjustment period involved, but it is doable.
If you're a dual income family and looking to shift to
Nail Down Your Why
As I point out in my book, Jumpstart Your Marriage and Your Money, one recurring pattern with financially successful couples was having a clear motivation and plan for their finances.
Learning to live on one income allowed them to save for their baby's arrival, pay off their debts, and in some cases, retire early.
Knowing the why allowed couples to not feel like they were depriving themselves, but helped them to prioritize things.
Create a Budget and then Automate Your Money
Fantastic to have a why and a plan, but you two have to execute if you want to accomplish something big.
Take your why and create a big budget around that. Keep your necessary expenses under one income (or as close as you can) and use that second income to pay down debts, save more, and put towards your goals.
If you're looking for a budget that is low key and can help you sort out your money into buckets, I have a free budget spreadsheet you can use.
There are also fantastic tools like Personal Capital, Tiller, and Mint that can make managing your money much easier.
If you're struggling to fit your essentials to one income, I do offer a free week long course – 5 Days to $5k that shows you how to find and save money in your budget.
You can sign up here.
Limit Your Debt
Debt can suck your paycheck dry.
Do me a favor. add up all of your monthly payments for your credit cards, medical bills, car, and student loans.
Can you imagine how good it would feel to have those payments be deposited or invested towards your dreams? Or maybe you work less because your financial overhead is lower?
If you two haven't already, start a plan to knock out your debts, one by one. Two highly effective methods are the debt snowball and the debt avalanche.
Once we paid off our car loan, we decided from then on we would buy our cars with cash.
Believe it or not, we've been able to find some great deals. We found and bought my Accord off of Craigslist! We've also used our local credit union to snag a wonderful car for my husband earlier this year.
Become a Master Shopper
It's unavoidable, if you're living on one income, you have to become savvy with your shopping.
For many couples, food is a huge expenses, right behind housing and transportation.
Instead of telling you to clip coupons, I want you to focus on big wins that won't take up too much of your time and mental bandwidth.
Learn which grocery stores typically have the best deals and shop there for most or all of your stuff. We found stores like Aldi's allows us to eat like foodies while still saving money.
Meal planning is also a big win as you can base your recipes around deals and feed your family well.
Be savvy can also help with
Learning how to shop like a pro means you get better value.
Thoughts on Living On One Income
As you can see, there are no secrets to living on one income. It takes an intentional approach.
I shared what's worked for us, I'd love to hear from you.
How many of you are already living on one income? What has been crucial to making that happen?
If you have any tips, stories, or questions, please leave them in the comment section below.
This article was originally published in June 2019. It has been updated in October 2021
We live on about 30% of our income (if you include my extra income in there as well). It’s nice and makes things less stressful!
Fantastic job Michelle! So glad that you guys have managed your finances to keep your essential expenses down.
I wish I had the option to do this. Unfortunately, when we purchased our current home is was a good mortgage payment, one that I could afford by myself. We forgot to account for all of the other bills and that is what caused us to be a two income household. I hope to change that when we sell this house and move into a long-time home.
Sorry that you’re stuck for now with that mortgage! I hope you can sell your place and find somewhere that suits your needs best. Please keep me posted!
It’s great to learn to live on one income, because you never know what life will throw at you. My wife and I planned on having two incomes, but changed our minds after our second child. It was a much harder adjustment and I would have rather that we learned to live on one income sooner than later.
Thanks John, you’re certainly right about life – changing minds about what we want to do happens. I’m glad you guys were able to make the transition to living on one income. Of course things could change again and you guys become a two income family again.
This is a great way to do things! We live on one income…barely. I am always looking for ways to make it easier to deal with. It is worth it for us, so I can stay home with our kids. Thanks for sharing!
We only just went down to 1 income and so far it hasn’t been too bad, but we have also stopped making as good progress on our mortgage debt as we normally do.
Thanks for the tips 🙂
I know a few couples who live on one income or close to one income and save everything else. I personally couldn’t do it because I wouldn’t want to give up my lifestyle just to save money. The key to financial happiness is to find a balance between enjoying life and saving for our goals.