Living in Australia is expensive enough as it is, but what if you’re a family cutting down to just one income? Here’s how to survive on one income:
1. Take inventory
Take an inventory of your income and all of your expenses. You’re going to need to learn to spend less, which means drawing the line between needs and wants. By figuring out exactly where your money is going you should be able to immediately cut down on unnecessary spending without making a huge impact on your lifestyle.
2. Get good advice
Spending habits are built up over time and are often tied to lifestyle and emotion. Seeking professional advice gives you another perspective on your situation, which can uncover things that may not be obvious to you.
3. Make a budget
If you’ve decided to downsize, you’re going to need a plan. A good way to reduce spending is to divide it into things that can be changed (for example, your food budget) and things that can’t (like your mortgage repayments). Identify the largest changeable items in your budget and address those first. Once you have a budget, make sure you stick to it!
4. Reconsider your debt management
With less money available to you, it’s more important than ever that you manage your debt efficiently and cut it down as soon as possible. Make a list of your debts, the repayments, and the interest rates, and figure out which ones need to be paid off the quickest. By prioritising your debts you’ll reach your financial goals sooner, and make your money go further.
5. Consolidate your credit cards
A wallet full of credit cards just encourages you to spend. Consolidating everything you owe across all your cards into one low rate credit card with as little as 0% p.a. interest for a limited time can help you get back on top of your credit card debt.
6. Save up for big purchases
Consider how badly you really want a new couch, a holiday, etc. By putting money aside each week to save for these things you’ll be able to practice saving and in the long term you might even re-consider whether you actually need them. You’ll also avoid racking up debt and owing interest.
Living with only one family income can be possible with the right planning and some willpower. By focusing on the bigger picture you’ll give yourself the best chance to stay on track.