Thriving on a Single Income: Financial Strategies & Planning

Household finances are as varied as the households that they support. With costs the way they currently are, many would argue that it definitely takes two incomes to maintain a household these days. Because expenses are rising faster (and higher) than the average rate of pay, people are at greater risk of falling into poverty.

Living on one income may be an accurate description of your situation. You might be divorced and living alone or with children. Perhaps your spouse is injured and can't work right now. Or, yours could be one an 'old-fashioned' family in which the wife stays home to take care of the kids and run the household. Then again, maybe you're single and content to be so. Whatever your situation, if you have only one income in the household, you'd probably benefit from a budget. When the only person to turn to is you, a budget can be a safety net. If you find yourself in need of rescue, a carefully planned and executed budget might just do the trick. Here are some tips for managing a budget:

• First, keep in mind that a budget is just that –a budget. The object is to have a greater inflow of cash and a smaller outflow. To do this, the bills must be reduced. And, with only one income, details are important.
• Pull out all of the money-saving tips in the arsenal to help you out. Limit utility bills. Change air filters every three months. Lower the temperature on the water heater. Use cold water as often as you can. Keep the thermostat set on a constant temperature, and so on.
• If you're regularly online, shop around for the best Internet provider for the least amount of money. Dial-up service can be good at times and quite poor at others. It's also more difficult to download large documents quickly across the telephone line. High-speed and cable access will give you the best product.
• The same goes for your telephone service. Find a provider that offers local and long distance services for one low price and with no hidden fees. If you don't need a landline phone, just utilize a cellular phone for all of your calls. One bill will almost certainly be less expensive than two.
• Create a savings account for the household. A credit union generally offers a higher annual percentage yield (APY) than a regular bank. Set aside and save as much as money you can each month. To make it easier, you can have your employer direct-deposit a portion of your check each pay period automatically into your savings account.
• Pay your bills online. This saves the price of stamps and the possibility that the bill will be late (or lost completely) by way of snail mail. Late payments mean added fees. For credit card payments, these can add up very quickly. If possible, set up accounts online that send electronic bills to you each month.

One income certainly means a tighter rein on your money, but not necessarily on your life. With just a little care and discipline you'll still be able to come out ahead.