| One Income Family Advice |
| By Credit Federal |
Published
01/28/2009
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Financial Tips
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Reducing Bills and Economic Survival as a One Income Family
Are you a one income family struggling to pay bills? Were you always a one income family, or did one spouse lose employment?
It's likely much harder to shift from two incomes down to one, because you grow accustomed to a certain financial lifestyle, especially if the shift was unexpected such as due to the loss of one spouse's employment or disability.
Here are free tips and advice to help you cope with one income:
Assess Your Situation - You need to fully understand the financial impact in order to make the appropriate and; likely drastic, changes you'll need to make. You need to have a clear view of how much money will be lost from the total income, and will the loss affect vital expenses such as health insurance? What are the non-monetary ramifications that could come from this situation, both good and bad? For example, if your family voluntarily went to one income so one spouse could stay home and tend to children, then certainly a positive aspect would be a savings in child care costs.
Reduce Bills to Offset Income Loss - Create a budget so you'll know where you spend money most and where you can make the biggest reductions, starting of course with nonessential expenses (luxuries). Use our free expense tracking software to see where you are wasting money. Here are suggestions on expenses to cut:
- Cable/Satellite and Internet Service. You could save hundreds of dollars a year by downgrading your service plan or by cancelling these bills altogether. Unless one spouse works at home and uses the internet; or if you have school-age children who use the internet for educational purposes, do you really need the internet? Do you really need cable/satellite TV channels?
- Telephone Service. Are you paying double... do you have a regular phone line plus a cell phone(s)? Consider cancelling one. If you have internet and need it, terminate your cell phone.
- Dining and Entertainment. This is where you should make the biggest budget cuts. There are plenty of activities you can do with family that costs far less than dining out or going to a cinema and buying concession snacks.
- Auto Expenses. With only one spouse working, do you really need multiple vehicles? If you still need two cars, keep the best running one for the working spouse, and trade the other vehicle for a lower cost car (lower payments or no payments), and offers cheaper insurance.
- Mortgage or Rent. As a last resort, after cutting as many expenses as you can, it may be time to consider refinancing your mortgage or finding a place to live with lower rent.
Generate Income at Home - In addition to cutting expenses, you may also be able to find ways to generate extra income with a work-at-home opportunity. With a yard sale you can get rid of items you no longer need; or want, plus make a few dollars. Maybe you have talents; such as painting, you could sell out of your home or via the internet.
Still Over Limit? If you cannot get your expenses below your income, consider credit counseling to adjust (lower) monthly repayment amounts. If that still doesn't work for you, consider a debt consolidation loan to payoff high interest debt like credit cards. For the most extreme solution; about on the same level as filing bankruptcy, consider a chargeoff debt settlement to reduce the total balance owed. This; however, adversely affects your credit like bankruptcy filing does.
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