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How to Save Money When Living on One Income
Whether you are expecting a new baby, have the desire to be a stay-at-home parent, or you want to start a new business, when one spouse decides to give up their income, it can be stressful. If possible, plan ahead for the loss of income; it will make it much less stressful. Then, find ways to save so that it is easier to get by. Here’s how.
- Eliminate debt. High-interest credit card debt is costing you money that you could be putting into savings. Start preparing for lost income by paying down, or if you can, paying off, these debts. You can also start looking for credit cards that have a lower interest rate; you can transfer your balance and save.
- Build your savings. Start to plan ahead for the time frame that you will be giving up your second income. Is it 6 months? A year? Use this time to start putting money aside. Every time you get a paycheck, add a little to your savings account. Making sacrifices early on will help you to be better able to do it when there is only one income.
- Reduce expenses. Take a serious look at your monthly expenses – utilities, groceries, car – and come up with a plan to cut costs. Compare companies for the best deals. You may even be able to eliminate a bill by getting rid of the service altogether. For instance, if you no longer use a landline, cancel your phone service. Cut back on utilities by turning off the A/C unless it’s essential. Turn off lights and appliances that you aren’t using. Get rid of your car payment and buy a used car that you can pay for in cash.
- Wants aren’t always needs. Take a good look at all of your purchases over the last 90-days or so. Are the majority of them a ‘want’ or a ‘need’? Usually, when we make more money, we tend to spend it on things we don’t need. Cut back on over spending and save every possible dollar. Frequently going out to dinner and that $5 latte are ‘wants’ that you can easily cut back on.
- Buy second hand. Consignment and thrift stores offer great prices on gently used items, sometimes you can even find brand new items with the tags still attached. You can even find great deals on housewares, furniture, clothing, shoes, and more. Try visiting sites like eBay or local online classified listings for more great deals. This is also a great way to bring in some extra cash! Have clothes, toys or household items you don’t use anymore? Sell them online or through a consignment store. See great bargains while you are out shopping? Pick them up and sell them yourself through online garage sales at a markup.
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