How We Survive and Thrive as a One Income Family (2024)

Supporting a family on one income is not the norm these days, but it’s something we’ve been doing since our first baby was born.

Living on one income in a two-income world can take some serious adjustment, so I wanted to let you in on how we manage it in case it helps you on your own journey.

How We Survive and Thrive as a One Income Family (1)

There are 6 particular steps we took to ensure we could sustain a single income life.

Contents

  • How we started to live on one income
    • 1. We combined finances
    • 2. We gave it a test run
    • 3. We bought an affordable house
    • 4. We live frugally as a rule
    • 5. We practice gratitude
    • 6. I found an outlet to make extra money from home
  • How we live on one income and save the other
  • How we started living on one income and saving the other.
    • 1. Write down your combined expenses
    • 2. Give yourself an ‘allowance’ for fun money
    • 3. Open a joint bank account and have both incomes transferred in
    • 4. Establish an automated transfer of one income to a savings account
    • 5. Set up an automated transfer of joint living costs to an everyday/checking account
    • 6. Micromanage your money for extra savings
    • 7. Invite as much extra cash in as you can
    • 8. Accumulate
    • 9. Enjoy
  • My tips for living on one income (so you can save the other)
    • 1. Start living on one income before you actually need to
    • 2. Set a budget that gives you some wiggle room, you can tighten it later
    • 3. Have big audacious goals to keep you motivated
    • 4. Be prepared to change your lifestyle

How we started to live on one income

We started to prepare for this lifestyle when we were saving money to travel around the world pre-kids.

It wasn’t until I became pregnant and we realised we’d never be able to get childcare in our area, that it was obvious we were going to make this lifestyle change permanent.

1. We combined finances

I’m just going to say this now, living on one income as a family will not work if you still have separate finances.

For some, joining your finances is a big deal. I know this from experience.

We made the decision to combine incomes and supercharge our savings well before we even decided to bring kids into the world. , and were even contributors to our joint expenses. Each of us paid half of the rent, half of the groceries, half of the utilities.

We each controlled our own spending money. Since I was terrible with money for a very long time, this gave both of us some comfort.

I wouldn’t fritter my partner’s money away and he wouldn’t have to pay my credit card bills.

Committing to combined finances meant I actually had to address the last of my debt (I’d been lagging on paying it back), so I could enter the new situation with a clean bill of financial health.

2. We gave it a test run

As soon as we realised we’d have to figure out how to afford a baby on one income, we took a good, hard look at our existing spending.

We’d already saved a lot of money to travel around the world the year previous, so we were good at saving, but saving money is easy with high incomes. Halving our income meant we were going to need to try harder.

We immediately wrote a one-income budget and started living as if we only had the one income coming in.

I planned to work right up until my due date, so effectively we were living on one income and saving the other (this is also a great way to pay down debt before going down to one-income).

Scroll down to the bottom of the post to read about how we used this technique to teach us how to survive on one income.

How We Survive and Thrive as a One Income Family (2)

3. We bought an affordable house

When we applied to the bank for the mortgage for the home we planned to raise our family in, they approved us for a purchase up to $650,000. Woah!

If we had taken them up on that crazy offer, we’d be a one-child family using daycare full-time as we’d both have to work long hours to pay the mortgage on a mansion and high property taxes and maintenance.

We ended up buying the ‘starter house’ that we could safely afford on one income. It cost us $225,000.

(We’ve since downsized to a smaller home (which cost $195,000) and paid off the mortgage on that smaller home.)

An affordable home is perhaps the biggest deal-breaker when it comes to thriving on a low income.

4. We live frugally as a rule

Frugal living did not come naturally to me. I was a spender. But since having kids and discovering how much I love to travel, I’m able to prioritise where I spend that money and be more frugal with the other stuff.

This means I’ve given up daily expensive coffees (they are a treat now), I walk as much as possible, and I shop the clearance aisle at the supermarket.

I meal plan, make my own and make do. Thrift stores are my first stop when I need anything I can’t easily fix or source for free. It’s become second-nature.

5. We practice gratitude

OK so this might sound crazy but I sometimes talk to my house. I put my hands on the walls and thank my house for keeping my family warm and dry.

I thank my lucky stars that we have shelter, and it is ours and it didn’t send us broke.

Every day the sun shines I am grateful that I can hang my washing on the clothesline and have the sun dry it for free.

I’m grateful for strong legs that can walk to school pickups, and bikes for trips that are further.

I’m grateful for payday, and my husband’s employer who treats him well and provides job security.

I’m grateful to my own wisdom for seeing this way of life as possible and taking the steps to make it happen.

How We Survive and Thrive as a One Income Family (3)

6. I found an outlet to make extra money from home

I was a career-woman. I loved my job and I was on the fast-track to the boardroom.

I’ve no doubt I was senior management material had I not left to be a mum.

Giving that up was hard as I gained immense self-worth and purpose from my work. When I discovered blogging I was absolutely hooked.

In the beginning, I didn’t make any money from blogging and wrote simply to talk about money. Then as the blog grew, I started to earn a small side income from it.

I only blog when my kids are at school or preschool, and when they are sick I can ignore it for a day and not lose income. I no longer have to let a boss know I need time off.

For now, the extra income is paying down our rental property mortgage. I pretend that money doesn’t exist and stick to our regular one-income budget.

But soon, it’ll be enough to support us and my husband will give up his job to become the primary guardian. And we’ll be a one-income family again, and we’ll thrive because we know exactly what to do.

Related: If blogging doesn’t float your boat, here are some more small business ideas for mums that can fit around your family’s schedule.

How we live on one income and save the other

If you’re interested in how we first started to live on one income and save the other, keep reading.

How We Survive and Thrive as a One Income Family (4)

I look back at our financial journey now and it’s clear the one thing we did that totally changed our financial future was to try out living on one income (and saving the other income) before we needed to.

It’s such a simple idea, yet it completely transformed our finances and has allowed us to live the life of our dreams (on a very average income).

The idea came to me when we were on our annual two-week holiday in Fiji. Crazy ideas often occur on tropical islands, I’m pretty sure that’s a scientific fact.

In the taxi to the airport at the end of our holiday, we were feeling a little glum. I said something like, “I don’t want to go home. Let’s just quit our jobs and go travelling”. Now, I only kinda meant it.

But my husband said yes, even though he had no idea how we could afford it. (Side note: My husband has a way of validating my crazy ideas. He almost always agrees with my plans, and sometimes he says nice things like ‘being married to you is such an adventure’. )

How We Survive and Thrive as a One Income Family (5)

Never one to let the lack of money get in the way of a good idea, I quickly started to brainstorm ways we could afford to travel.

We both earned OKincomes, and perhaps more importantly, we lived in a shared apartment with another couple which meant our weekly rent was about 10% of our combined income.

We had no consumer debt but we did have rental property mortgages and my student loan payments to consider.

From some rough scribbles (I’m such a pen and paper gal) I figured that we would be able to save 50% of our income if we were prepared to live frugally and make some sacrifices.

How we started living on one income and saving the other.

1. Write down your combined expenses

The first step was working out our actual cost of living. I completely ignored what we earnt and focused on what we needed to spend to stay alive. That included rent, food, insurance, medical, clothes, transport.

With our very low rent, we had a surprisingly low essential cost of living.

It was a complete eye-opener for me, as I realised then we’d been spending most of our money on nice things like eating out most nights, drinking at the pub (a lot) and going on holiday whenever we felt like it.

2. Give yourself an ‘allowance’ for fun money

Once the essentials were covered I set aside an amount for each of us to blow each week. It started off at $170/wk each (that sounds crazy to me now) and we eventually got it down to $100/wk each.

I know that’s a lot of money but we were young professionals we liked to spend a lot of money on our social life.

So at the time, it was tough to reign in our spending to under $170/wk. (Update: we now get $25/week each – and it’s fine!)

3. Open a joint bank account and have both incomes transferred in

Both of our incomes went into one joint bank account. This was a simple online saver.

4. Establish an automated transfer of one income to a savings account

I set up an automated transfer out of the holding account each payday into a high-interest online saver. As I was on a salary, my income did not fluctuate so I allocated my entire paycheck to the savings account

5. Set up an automated transfer of joint living costs to an everyday/checking account

From the holding account, all joint living costs and expenses were paid. Plus our weekly allowance was transferred from there. We each kept our own personal cheque accounts to access our ‘blow’ money.

6. Micromanage your money for extra savings

This was my favourite part of each week (I know how sad that sounds). As my husband was paid each Friday I would get up early to log on to internet banking before work.

If he’d worked overtime the week previous we’d have extra cash to allocate towards our savings goal. I kept a spreadsheet with percentages and would text him things like ‘today we are 2% closer to our goal – YAY!!!!!’.

If we were able to spend less on groceries than we’d budgeted, or we had a quiet weekend we’d have more to go into savings.

I cannot tell you how many times I transferred micro-savings of $1.26 or $3.34 into our high-interest online saver. It probably wasn’t healthy but I totally nerded out over that.

7. Invite as much extra cash in as you can

One of the largest benefits of living on one income is that any extra cash can be saved.

So even though I’d earn more in my day job, little extras like paid surveys (these are my top picks for US surveys, paid surveys in Australia and New Zealand), doing market research and using coupons and cash back sites whenever possible actually went a long way.

Anything made from those little extras went straight to the savings fund.

8. Accumulate

If you’ve never saved money before you are in for a treat. Have you heard that saying ‘Money attracts money’? Well, it’s totally true.

Once we had a few thousand in our savings account money just seemed to accumulate itself.

At the time we were earning around 4.5% interest which helped greatly, but it was something else. We’d changed. Our whole perspective on money had shifted.

We now knew how powerful our combined incomes were and with a little planning and sacrifice, we could do whatever we wanted.

Most importantly, we were shooting for the same goal – it was a joint effort and we were equal players. I don’t think we could have done it if one partner wasn’t highly motivated.

How We Survive and Thrive as a One Income Family (6)

9. Enjoy

In May 2011 we boarded a flight from Auckland to Santiago de Chile. From there we worked our way up the continent to Bogotá, Colombia.

We had a daily budget of $60USD to cover food and accommodation, and we managed to stick to it.

We splurged a little on an eco-lodge in the Amazon rainforest and to stay in slightly nicer hotels when we were feeling burnt out.

But that was just the beginning of our trip, after that, we met my husband’s parents in Los Angeles and enjoyed the City of Angels and Las Vegas with them before flying to the Cook Islands where we had a little wedding in the garden of our bungalow.

In total, we spent less than $9000USD for 4 months in South America, the US and for our super-cheap wedding in the Cook Islands.

3 months later I threw up in the waste-paper basket of my new temp job and realised I was pregnant. Thankfully, we had our money mindset all sorted so my first thought wasn’t ‘how are we going to afford to have a baby?’

(It was ‘Can you travel with babies? Seriously. Before I even told Dave that I thought I was pregnant I went to the library to research travelling with babies.)

My tips for living on one income (so you can save the other)

1. Start living on one income before you actually need to

We started ‘living’ on one income when had 2 incomes. It meant we could mess up and fail and make adjustments.

Now we truly only have one income as I’m a stay at home mum but we are totally fine, we know how to live like this because we’ve been doing it for over six years.

2. Set a budget that gives you some wiggle room, you can tighten it later

Be kind to yourself when you are making major life changes. Give yourself an allowance to blow whichever way you like.

And budget more than you think you’ll need, you can always tighten it up later when you’re in the groove of living on one income.

3. Have big audacious goals to keep you motivated

Whether you want to be a stay at home parent, buy your own home or travel the world with your kids, your goal has to be big.

You could even shoot for early retirement.

Little goals are easy to disregard, but having an audacious goal and letting everyone know about it will help keep you motivated.

4. Be prepared to change your lifestyle

Nothing changes if nothing changes. If you want to live a big, full life and do all the things, you need to make sacrifices.

You might downsize your house, move to a cheaper suburb or take on an extra job. You might sell your car and start cycling everywhere. Keep your goal top of mind and it’ll all be worth it in the end.

All our travel was amazing, and we have more planned. But it’s the everyday living that is made easier by living on one income.

It’s the one reason I’m able to stay home with my boys and write this blog, taking freelance writing jobs as they suit.

There is no pressure on me to earn money (although I’m super-ambitious so I have big plans for the near future) which is a lovely way to live when you have young children.

For us, living on one income skyrocketed our savings account, taught us how to live within our means and on a budget and gave us the ability to appreciate the simple life.

It’s my number-one tip for couples with two incomes – if you can do it (and I realise many can’t), live on one income and save the other. I promiseyou won’t regret it.

How We Survive and Thrive as a One Income Family (7)

How We Survive and Thrive as a One Income Family (2024)

FAQs

Can a family survive on one income? ›

Is It Possible to Live on One Income (After Living on Two?) It's certainly possible to live on one income, even after being accustomed to two. Maybe you or your spouse is now a stay-at-home parent or caring for an elderly relative, or one of you lost your job.

How to thrive on one income? ›

Here are some tips to successfully manage the transition to one income for you and your household:
  1. Update your budget. ...
  2. Make savings work for you. ...
  3. Reduce monthly bill amounts. ...
  4. Look into unemployment benefits. ...
  5. Pay down debt. ...
  6. Seek out low-cost activities. ...
  7. Plan meals to cut food costs. ...
  8. Tap into your emergency fund.

How to survive on very low income? ›

How do you survive on a low budget? Many financial experts recommend the 50-20-30 rule for low-income families. Spend 50% of your income on food, medical, and housing needs. Use 20% on saving an emergency fund and paying down outstanding debt.

How to live well on very little money? ›

Tips to help you live below your means
  1. Create a plan for your money. The act of assigning a job for every dollar can be empowering. ...
  2. Automate your savings. ...
  3. Pay yourself. ...
  4. Live off one income if possible. ...
  5. Look for ways to lower your discretionary expenses. ...
  6. Reflect on your financial habits. ...
  7. Drive used. ...
  8. Pay less interest.
Jul 10, 2024

Can a family live on $1,000 a month? ›

But it is possible to live well even on a small amount of money. Surviving on $1,000 a month requires careful budgeting, prioritizing essential expenses, and finding ways to save money. Cutting down on housing costs by sharing living spaces or finding affordable options is crucial.

What single income is considered rich? ›

The top 1% is a byword for wealth — and it's only gotten harder to become among the nation's top earners. Nationally, it now requires annual income of at least $787,712 to be among the top 1%, a 20% increase from last year, according to SmartAsset's analysis of IRS data.

What is a great income for a single person? ›

To live “comfortably” as a single person in 99 of the largest U.S. metro areas, you'll need a median income of $93,933, according to a recent SmartAsset analysis.

How can I live a good life on a low income? ›

3 ways to live a happy life without a lot of money
  1. Have goals and monitor their progress. ...
  2. Be close to people in the same situation as you. ...
  3. Change your mindset. ...
  4. Live a frugal life and accept that you have a limited income. ...
  5. Make sure you have extra money. ...
  6. Involve the family.
Dec 6, 2022

Can I support a family on 70k? ›

Living as a family on $70,000 could be challenging. According to the Economic Policy Institute's Family Budget Calculator, the monthly household cost for two adults and two children living in Dayton, Ohio, for example, adds up to $7,658, including housing, food, childcare, transportation, healthcare, and taxes.

What is considered low income in the USA? ›

2021 POVERTY GUIDELINES FOR THE 48 CONTIGUOUS STATES AND THE DISTRICT OF COLUMBIA
Persons in family/householdPoverty guideline
1$12,880
2$17,420
3$21,960
4$26,500
5 more rows

Is 20k a year poverty? ›

Pew Research considers middle class to be $56,000 to $156,000 for families of three. Thus, a family of three on $20,000 is not middle-class; it's actually below the poverty level. While an individual on $20,000 a year is not below the poverty line, they are still not considered middle-class.

Is 35k a year poverty? ›

The Poverty Threshold in 2024

Under their guidelines, a family of four is considered impoverished if they earn $30,000 or less per year. That number is slightly higher in Alaska and Hawaii, which tend to have higher living expenses.

How to live extremely cheaply? ›

12 Tips for Frugal Living
  1. Choose quality over quantity. ...
  2. Prioritize value over price. ...
  3. Use credit wisely. ...
  4. Declutter regularly. ...
  5. Use a budget to guide your spending. ...
  6. Know the difference between wants and needs. ...
  7. Be a savvy consumer. ...
  8. Prioritize your values.
Oct 17, 2023

How to enjoy life without money? ›

Whatever your situation, here are 13 fun things to do that don't cost money with friends and family:
  1. Go on a picnic. ...
  2. Go to no-cost museum and zoo days. ...
  3. Give geocaching a try. ...
  4. Leverage your chamber of commerce. ...
  5. Take a historical city tour. ...
  6. Visit a farmers market. ...
  7. Go camping. ...
  8. Do a photography challenge.
Feb 14, 2024

How can one survive with whatever little money they have? ›

Creating positive spending habits can help you survive on a low-income budget. When you spend your money wisely, it can go a lot further. Similarly, breaking your bad spending habits will help you prosper even if you don't make that much money.

How much does a family need to make to survive? ›

For a family with two working parents of two children, the total family income will need to be about $301,184 for the same level of comfort. Relatively, it's less expensive to raise a family in California than live comfortably alone.

What is a livable wage for one person? ›

Living Wage Calculation for California
1 ADULT2 ADULTS (1 WORKING)
0 Children1 Child
Living Wage$27.32$44.11
Poverty Wage$7.24$12.41
Minimum Wage$16.00$16.00

How much income do you need to survive? ›

Key Findings. On average, an individual needs $96,500 for sustainable comfort in a major U.S. city.

How many families only have one income? ›

In 2021, single-income families made up approximately 27% of all family households in the United States. It highlights the fact that many households are relying on a single source of income to make ends meet, and that this is a reality for a significant portion of the population.

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