Living on One Income?! an FCS Agent’s Experience
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Is the uncertainty of the economy scaring you or driving you a little crazy? Is the certain surge of everyday necessities for your family leaving you short of money at the end of the month? Do you constantly find that the dollar sign comes up when that new pair of shoes or shirt needs to be purchased for your child(ren) who all of a sudden hit a growth spurt? Maybe somehow, your family seems to keep going way over your food budget each month.
We have some tips that we will be covering over the next few months in a series of articles where we have compiled the top five tips from Extension specialists and other reputable financial specialists. Before you think about implementing these tips, we encourage you to reflect on what it means to be content in all circumstances. Research says that those who practice gratitude and contentment oftentimes reduce their chances of growing unhappy with life. Being content with what you have will also prevent the neverending cycle of buying happiness and ultimately over-spending. There is a consensus across the board that these five tips have stood the test of time and my own family has been implementing them and have seen them work. In today’s article, we will cover how to make a budget and trim a budget.
Tip #1: Make a Budget.
This tip is number one because it’s hard to do all of the other things without it. The budget is the game plan or soil for your finances. Without a good game plan, a sports team will not be very effective against their opponent and a garden can’t have all sorts of flourishing plants in it without rich soil. Likewise, without a good budget, you won’t be very effective in spending your money. You can start by simply sitting down with all who need to be at the financial budget table within your family whether it’s just you, a spouse, older children, or parents. The consensus is when making the budget start with your monthly income and the cost of all of the necessities such as rent, utilities, insurance, food, gas, phone, transportation, etc. Next, most people will look at their transactions on their banking app, website, or statement to get a better idea of how much they are spending sliding necessities such as food or gas as well as the things that they want. Whenever most folks take a look at where their money is actually going, they are shocked at how much they spend on food, gas, and other purchases. A lot of times we don’t think about the amount that we spend on a simple expenditure like grabbing a coffee at a coffee shop every other morning. Let’s say that four times per week at $5.00 per coffee is the rate. You will have spent $80.00 per month and $960.00 per year.
In our family, we had to sit down quickly and develop a budget because my wife and I were transitioning to one income shortly after we became newlyweds because we were blessed to have a baby boy within the first year of marriage. This meant a lot of changes for our family including finances. After sitting down and looking at incoming revenue, necessary expenses, secondary needs, and wants. We started doing the following.
- Trimming or cutting expenses such as streaming services, cell phone providers, internet, and subscriptions. If it was not a need and didn’t impact the efficiency of our day-to-day lives we cut it. If it was something that added to efficiency and leaned towards being a need, we trimmed it to reduce cost.
- Reduced the amount of times we ate out per week. We went from eating out 3 times per week to one time per week which is usually our date night.
- Selling things that we no longer need or simply donating them to another family or others who need them.
- Learning how to repair things or doing things ourselves so long as we have the skills and tools to do so.
- Increasing Revenue: Look for side jobs or forms of trusted passive income.
Look at the following resources for a deeper dive into the information in this article. Be on the lookout for our next article. In the next article, we will talk about building security as we settle into family survival on one income.
- Navy Federal Credit Union, Strategies For Living On One Income
- University of Utah Extension, Budgeting Tips by Tasha Killian, Extension Assistant Professor
- University of Kentucky, Martin-Gatton College of Agriculture, Family Wise, Money Wise
- SoFi Learn, 12 Tips for Living On A Single Income