14 Tips to Manage One Income from Two
by: Remie Longbrake | published: May 8, 2020
Life can and is unpredictable. This is one of those times.
One day you’re managing your finances just fine in a two-income household. Then the unexpected happens. Currently, that unexpected is facing millions. With the coronavirus upon us, what can be done to manage our finances effectively?
Truth is the times have been difficult lately. Many families have found themselves at a loss, factories have been shut down, stores closed, and many have been furloughed by their employers or their business forcibly closed by the government due to the outbreak of Covid-19. Although we should always have a financial emergency plan in place, truth is many don’t. So what can be done to survive in these times? Use these tips outlined below to help develop a plan.
1. Assess the circumstances.
Most families do support themselves by having two incomes providing for their financial security. What happens however when one of the spouses are furloughed? Unemployment can help, however it’s not a long term solution. And what if the employer makes permanent cuts and your not returning back to work? Preparation is a part of the plan. This plan outlined below will highlight some tips to enable you to take action so you are not financially ruined and are able to make end meet.
Whether you’re a member of one of these families, or have friends or relatives who are, take a look at these tips to help keep single-earner household. Losing a major source of income may feel devastating, but try not to spiral into more hardship. First step is to assess where you are at the moment. Take stock of your resources that have set aside for emergencies. Also figure out if there’s any money that’ll be coming in as a result of the income loss. Unemployment benefits, and stimulus check are some of those. Unfortunately these can take time to process and deposit. Other sources could be a severance package, alimony, child support, etc. lds on good financial footing:
How much do you have right now, and how long will that last you and your family? Get a basis and figure that out first.
2. Make a budget.
If you don’t already have a budget, now is the time. A budget will help assess the financials and get a foot hold on where you’re at in regards to the money coming in and what the expenses are. Creating a budget is a good idea for most everyone, but especially for families with limited income. Write down your budget, with specific categories of spending, and stick to it. Online there are plenty of free budgets to print out. We have our budget template free on our website, however what ever works for you. The key is understanding exactly where you are at financially.
3. Cut expenses.
If you truly are limited to one income (or none for that matter), what can be cut from the expense column? The obvious ones are the cable bill, cell phone plan, eating out, gym membership, and anything not tied down to a contract. For those expenses that are in an active contract, see what can be done to limit the penalties or extend the payment period without hurting your credit.
4. Downsize where possible.
We Americans like to have a lot of stuff. But do we really need everything? A part of our problem is we try to out do our neighbors. It’s a status thing that many are guilty of subconsciously. We tend to outspend are incomes and are financially irresponsible. To many people don’t save, but yet spend every weekend eating out. This may be you, as it is most Americans. If it is, don’t feel I’m shaming; the goal is to be more responsible. Question yourself and those you live with. Do you use everything that you own? What can downsized or downgraded that could be sold in a hurry to cover needed expenses? First reference your budget, then make a list room by room, what can be sold? Include the garage, attic, etc. There are apps such as Facebook Marketplace, Craigslist, Ebay, your local paper. Those are all good resources to sell goods. The goal is to not necessarily get top dollar; sell what you can and only spend those earning on what’s needed right now.
5. Utilize coupons.
There is nothing wrong with couponing. Some people feel like they are above it. I say get over it, these are no times for that attitude. Be resourceful. Same goes with dollar stores; you don’t necessarily need name brand. Use those coupons as much as possible. Most groceries and department stores have a rewards program where coupons will be sent to you or can save in store or online.
6. Shop around.
I really do like shopping, although I do research first however. As much as I like supporting my local stores I will buy online. I use Amazon among other websites, and will compare prices for most things besides groceries. I do limit myself to my budget, and I do reference that and stick to it. When it comes to clothing I will use Goodwill or wait on discounts to come about. One thing I do not do however is stress about it. If there isn’t a deal for what I need, I will make sure it’s a need and not a want. If it is a want, then I first make sure it’s in the budget. Otherwise, if it isn’t I’ve been known to bargain with people, if the answer is no, I’m willing to move on. And if I must have it then I act appropriately. The thing is things do come up, that is why it's important to have savings measures prepared accordingly. For those who don't, which is most, then follow this guide to help determine the best outcome.
7. Increase income.
You would be surprised with all the opportunities to increase income. The problem most have is the mindset that they must work for someone else or they must suffer. The world is charging, and so do you. Entrepreneurship isn’t for everyone, however it is smart to look at your skillset and what can be done to increase income potential. The problem is many employers are not hiring right now. What are your skills and how can you support your family, without waiting on the unemployment check to come in. We can help with skill assessment if needed. However, I have said many times, don’t depend on the government. It is easy to find opportunities, but be careful. Try to stick to those that are proven and you know other people doing it. Uber, Lyft, grocery delivery, lawn care, cleaning companies, etc. You don’t have to make a career change, and this isn’t the time for that. You need quick money, where a saidd employer can immediately get a return on investment from you. Stick to what your good at and can pick up quickly. Do be careful for online scams and promises to make large sums. Always do your research.
8. Tap savings.
If you have savings in place, using this resource first is probably the best option. The problem is most families live paycheck to paycheck so you may not be so fortunate in these times. Tap savings first if available. Also, consider taking a loan from yourself. Cash life insurance could be an option, as could be a withdrawal from your 401(k) or retirement fund. You could also consider using equity in your home through a refinance or HELOC loan. As anything consider all fees and interest. Anything you take from your retirement is going to cost you in earning potential in the long run. Understand your options and the risks involved is key.
9. Debt dependency.
If your options are limited, do be careful about taking on another loan. You want to exhaust most, if not all other resources first. Interest rates are low, so you could consider a home equity home or HELOC if it is feasible. It may be possible to take out a personal loan or business loan if your qualify. Other options could be taking on a credit card with 0% APR or 0 transfer fees. Again, consider the risks and fees and impact to credit.
10. Be a doer.
I love the idea of being more self-sufficient. We become better to learning to do more and increasing our skills. The internet is a great resource to learn things. Whether that is sowing torn pants, changing own oil, or fixing something around the house. I do think many people get over their head however. It is great to learn, however be careful and also consider your time. The time you invest doing something yourself could be better spent working or doing something that can bring in more income. You want to look at all options including the negatives.
11. Seek out assistance.
There is nothing wrong with reaching out to those who can help. There are resources available for these reasons, to help those in financial trouble. The problem is now however is the coronavirus is so widespread it has strained the system. You definitively want to start local. Whether that is your local pantry, job services, unemployment office, churches and more. Ask around and don’t be afraid of asking in the first place. Your most valuable resource after yourself is who you know. Always be networking, not necessarily for friendships, but for opportunities.
12. Say no.
Sometimes we just have to go without, whether that is the short term or possibly longer. That may mean saying no to something you want that is not a need. This is the time to stick to be basics and survive. It can be a balance between needs and wants, and not everyone is able to distinguish. If that’s you reach out, we can help. Also, this means saying no the those you care about. That could be your kids, because they want to hang out with friends or your own friends who want something from you. Many go on vacations once school is out. This may not be the best time for that. It’s probably best to invest in yourself and develop other resources, especially if that emergency fund and savings isn’t up to what it should be.
13. Talk it out.
It's vitally important to share your thoughts with your family and staying connected. These are trying times and very stressful. We all need to be better communicators and truthfully that starts at home. Many of us, especially men tend to clam up, trying to be superman. There is nothing wrong with wanting to take care of your family, however let those you care about and those who care about you know what’s going on. Many families I see have one spouse who handles the finances. That’s dangerous, especially in these times. I get that finances aren’t always most interesting and it can cause stress in families, however that stress can break relationships with ease. Make this time a focal point to communicate more.
14. Be involved.
See what you can do to help others. Reach out to those who are also in need. Neighbors, family, friends, and co-workers. If you have been furloughed (or not for that matter) see what your employer needs. Trust me, they are suffering to. What can you do to go above and beyond right now? Take inventory of what is needed, for your own needs but others too. Be that friend that people need right now. Especially be safe and be resourceful.
These are times that most are not prepared for. How are you preparing? If you find your family limited in income, it’s crucial to develop ways to overcome the immediate challenges. We don’t know how long this will last or what the long term circumstances will be. We will survive, but in what way? Use your resources effectively, that includes us. Let us know what you need and we can likely help you develop a plan. Regardless, take action and strengthen your financial IQ. Do what is feasible and all you can help your family survive a difficult situation and prepare ways to thrive.
Notice: This article is for educational means only. It is not meant as a means for investment or financial advice. Always seek proper legal and financial council.
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