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Are you part of a two-income couple? How would you feel if you suddenly were challenged to live off just one income?

For some, the hand may be forced, for example, suddenly losing or quitting a job.  I actually encourage the option to live off one income in some planned circumstances, and here’s why: when you take the initiative and do this on your terms you buy choices in your future.

How does that work? You both live off one income and the other wage is used to build a home loan deposit, pay down a mortgage, extinguish those bad debts, put into investments or bolster your superannuation (whatever your priority is). The strategy is quite similar to one I offer clients who have just enjoyed a big promotion: live as though your income is unchanged, and sock away the rest for future financial freedom.  Once you start living to the new income, it’s incredibly difficult to take chunks out.  But if you make the change before you get used to the extra you will be able to see your investments grow and see something more for your money that buy yourself choices later.

‘Survive’ and ‘live’ money

If that sounds a bit harsh, perhaps consider starting with the attitude that you ‘survive’ on one wage and the other gives you ‘a life’ – a big holiday for example – while building savings and paying down the mortgage too.

Either as a single or as a couple, such a strategy does take commitment. It’s not uncommon for clients initially to look aghast and howl that they’ve not enough to live on with both incomes. If everything is stretched and you really need those two wages just to survive, that’s a lot of financial pressure to be under. I suggest, then, a close look at lifestyle leakage: where is their combined income going? Often, lots of little things like those cups of coffee, takeaway dinners, drinks after work, the club membership that’s unused, those shoes that just begged you to wear them out the store even though you have four similar pairs in the wardrobe…they all add up. I’m not Scrooge (my shoe collection rivals Imelda Marcos’s and I do enjoy nights out, having fun) but I am keenly aware of how money can just vaporise. Curiously, it happens less when you use cash—which to my mind is all the more reason to buck the trend of relying on digital transactions and electronic payments wherever possible.

Two looming life circumstances may encourage you to investigate the ‘live on one, pay down the other’ approach to earnings.

Planning a family extension

The ‘live off one income, invest the other’ strategy works particularly well if you, as a couple, expect to have a family someday. When parenthood hits, the reduced income isn’t as big a shock to the system.  Be realistic, expect things to change and know that this is for a season. By planning ahead financially, you may be able to hit the pause button with some measure of ease.  Too many parents are forced to go back to work.  Would you prefer the choice?

Changing job front

The second scenario is not so obvious. Few jobs are for life nowadays. We see many organisations restructuring and positions and roles being made redundant. If one of you hears as much as a whisper about potential redundancies in your place of employment, I suggest looking at this “live off one wage” strategy.  If a redundancy package is offered, consider it a bonus. There may well be another role out there for you – but it may also take time (or you may want to reinvent your working life). Either way you both benefit from having paid down debts and built up savings.

On similar lines, changing workplaces can create low morale and high stress, Perhaps, you are so over your workplace you want to quit. What if you hang in there for a while, live off the one income, save the other, look around at opportunities? Maybe you could even access your income protection insurance on the basis of your mental health while still in the job? (Income protection is ordinarily not payable if you quit).

Alternatively, one of you may want to start your own business. There can be quite an outlay in the set up and running of a business with not much, if any, return early on. Having an emergency fund tucked away, or your big commitments paid in advance can buy the time needed to get your business on its own two feet.

There’s a lot to be said for living life to the fullest: that doesn’t have to mean maxing your joint household income.

Do you have any tips for couples about to be living on one income?  We’d love to hear how you’ve managed …

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  • We have always been a single income household. Either my partner or myself have worked, but not at the same time. It’s not that hard when it’s all you know

    Reply

  • it is hard but possible,…sometimes your quality of life improves in other areas e.g time with special ones

    Reply

  • I can’t imagine being in this position. We are dual income and we have challenges although I think we all have challenges irrespective of our situations.

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  • We are in a similar situation at the moment. It is quite daunting after having two incomes for many years. I’ve always been frugal when it comes to shopping so that has been good ground for staying on track. I do tend to be more shopping savvy now and look out for weekly bargains/promotions and stock up on necessities while they are at a reduced price. I’ve also started doing online surveys whilst I am looking for work. They don’t pay much, but every little helps. I wash the car on the lawn to save on both water and the expense of a car wash; I walk to the shop where/when I can instead of using the car; monitor petrol prices on a mobile app and tank up when it’s cheap; all of these can add up.


    • Nadine your reply is almost exactly what I would be writing lol we are living off one wage the last 2 years because of health issues,and being a mum of 4 sons I learned early in life to make do with what you have now they are all grown and only us 2 at home. I also do surveys and it comes in very handy for groceries and fuel and makes me feel like I’m also contributing to the household. And basically cook everything from scratch.

    Reply

  • It can certainly be difficult, but keep down on take out or out to dinners and don’t impulse buy.

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  • always a challenging balance

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  • Determining between needs and wants, with little indulgences here or there. Not being too frivolous I guess.

    Reply

  • Atm, we live off of my husbands scholarsh money! We are doing just fine. Buy second hand, live off one car atm, try cook at home most of the time, although we buy take out a little too often lol having 3 young kids, dinner time is a nightmare.
    We try not buy things that are unnecessary..

    Reply

  • Oh do so agree with this. Once you live up to the fullest it is so hard if something happens. We made sure we stayed on one wage when we first bought our house – once we paid it off we didn’t know what to do with the extra money so we bought a block of land and built another house which we sold and fully refurbished our own home. But by then we were pensioners and it’s helped us live within our means these days too.

    Reply

  • It can be difficult that is for sure. There can be a few sacrifices too

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  • Being prepared is key. It’s so easy to buy a bottle of water here or a snack there but it all adds up. If you always carry water and snacks you won’t get caught out.

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  • When we go out for the day we take a flask of hot water, re-usable plastic mugs (if you accidentally drop or knock one it won’t break), a small containers of coffee, sugar, teabags in a basket; lunch and some milk in a cooler bag also a container of biscuits or sliced homemade cake. We always carry bottles of water regardless of where we are going – short or long distance. Imagine buying the contents at a takeaway for one or two people and there is usually 4 or us. We have done some wonderful day trips. What we save in food and drinks pretty well pays for our petrol.

    Reply

  • We budget and we are wise with our money – balance between paying debts and experiences.

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  • Another one for my daughter. They’re hoping to have a baby in the near future and will have to adjust to one income for a while. I think the hardest but for my daughter will be the dependency on someone else. She’s always been super independent

    Reply

  • We manage just fine. I do some extra work when I can but we don’t need it to survive. Just live within your means.

    Reply

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