5 Major Changes When Transitioning to Single Income
Why Are You Transitioning to Single Income?
There are two situations in which you might find yourself transitioning to single income. In scenario one, you’re getting a divorce or separation. Therefore, you’re going down to one income but you’re only supporting yourself (or potentially you and your children.) As a result, your income will change but so might your financial needs.
On the other hand, in scenario two, one person in a two-income household won’t be working for a little while. Perhaps they have an illness. Maybe they’re unemployed. Perhaps one of you is becoming a stay-at-home parent. Whatever the case, your household costs aren’t likely to change without some effort on your part. And yet you have to find ways of transitioning to single income.
5 Major Changes to Consider for Your One-Income Household
The biggest changes to your household will likely depend on why you’re transitioning to single income. Nevertheless, these are the five major changes to think about as you go through this shift:
1. Downsize Your Home
Rent or mortgage typically consumes most of a family’s budget. As a result, this should be the first thing to change when your income changes drastically. If you’re newly single, then you might move alone (or with your kids) to a smaller place. If you’re still in relationship, can you find ways to reduce housing costs? If you can’t move right now, is it possible to get a roommate or do some Airbnb rentals in your home in order to offset your housing costs?
2. Reconfigure Your Meal Plan
Meals make up another big portion of a family budget. If you’re newly single then this is a great place to cut back on spending. Learn how to make meals for one.
If, on the other hand, you’re transitioning to single income but still need to feed the whole family, then you might need to get more creative. Nevertheless, it’s a great time to think about ways to slash that budget. Simpler meals made from fresh produce, purchased seasonally and with coupons, can be a great way to save money on groceries.
3. Look At Where You Compromised At Home
We all make compromises when we live with other people. For example, you might like to keep the house a little bit chilly but you accept that your partner is always cold and turning up the thermostat. If you’re newly single then you can turn down that temperature, put on a cozy sweater, and save money on your electricity bills.
Even if you’re still living together, you might take this opportunity to renegotiate those compromises. Since your partner is going to be home more now, perhaps they can do a little home maintenance to eliminate drafts and improve the home’s heat retention. As a result, you can still lower that thermostat.
4. Cut Out the Frills
Whenever there are big changes to your income, you have to review your budget. Go through it with a fine tooth comb and cut out all of the unnecessary things. Sure, Netflix doesn’t cost all that much. But you have to cut back where you can and it’s not a necessity. Find free replacements for the things that you’re spending money on.
5. Change Plans for the Future
What have you been doing to plan for your financial future? Were you relying on a second income? Where is your retirement plan at and where does it need to be in the face of this new change? Whatever the reason for transitioning to single income, it’s likely to affect the way you invest in your future. As a result, it’s important to review this now!
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