Everything seems to be going up – inflation, healthcare costs, housing. Covering those ever-rising expenses becomes even more of a challenge when you’re living on a single income. But you can do it! We put together our best money management tips for a single-income household.
We’re going to start with the cornerstone of any money management effort: a budget. Then, we’ll offer up some tips for making that budget work for you.
1. Make a budget. If you don’t already have something in place to keep an eye on money coming in and money going out, now’s the time to make a budget. If it helps, reframe it as a spending plan. You can be as detailed as you like but be sure you cover housing, food, utilities, debt payments (credit cards and loans), and other items that are particular to your situation. One item that is easy to overlook but shouldn’t be: “paying” yourself. This simply means that you set aside a certain amount – even if it’s minimal at first – to go toward building an emergency fund and/or savings.
2. Track your spending. Now that you have a budget, it’s important to keep track of your spending. How you choose to do that is up to you. Options include a spreadsheet, an app, or reviewing transactions in online or mobile banking.
3. Eliminate unnecessary expenses. As you look down the list of expenses, are there any you could cut out? Maybe you could reduce your daily fancy coffee fix to just the weekends or one or two fewer days each week. Are you getting the most out of every subscription service you’re currently enrolled in? These include meal services and of course, streaming services. You may find that, for example, you never watch Netflix anymore. Why pay a monthly fee for something you don’t use?
4. Adjust your budget. This is not a set-it-and-forget document! It lives and breathes with you. At first, you’ll want to keep a close eye on what’s happening with your money in/money out situation. For example, if you’re finding that your electric bill is consistently higher than what you originally budgeted, you’ll need to accept that reality and plug in the new number.
These four tips should go a long way to positioning you to live comfortably as a single-income household. But don’t stop here. When you make learning about personal finances a priority, you’ll be surprised by the amount of information available to you. A great place to start is our Resource Center!