Divorce, job loss: How to survive on one income

Suddenly finding yourself on a single income is a harsh reality. These 7 tips from financial adviser Helen Baker will help ease the stress. 

Sometimes a single income is a choice, such as when a baby arrives. Other times it’s by default, such as separation or a partner passing away. Now, more than ever during COVID-19, it could also be because of job loss.

Whatever the reason, life on one income is a big adjustment. This checklist will go a long way to simplifying that transition.

1. Make friends with your budget

Relying on one income when you’ve been accustomed to two requires some cutbacks. If you have a household budget, revisit it and adapt it to your changed circumstances. If you haven’t got one, now is the time to start. Be diligent in separating your needs from your wants. Cut things you no longer need – unused subscriptions are a great start. And set some money aside in an emergency fund for a rainy day.

2. Learn to say no

Many parents try to maintain the standard of living their kids previously enjoyed. But doing so on one income is impossible. It means being brave and saying no sometimes. You don’t need to deny them – and yourself – every ounce of fun, however. Just compromise on where your cash goes.

Swap nights out at a restaurant for a nice meal at home. Trade beachside holidays for days out at a local beach. Buy brand names your kids love second-hand or from factory outlets instead of retail.

3. Review your bills

Take some time to review how much your household bills are costing you. Shopping around can deliver substantial savings on things like insurances, mortgage rates, phone and energy bills. You may not even need to switch – simply ask your current provider for a better rate in line with what competitors offer!

4. Give your kids more responsibility

Make your kids earn their pocket money by taking over more of the household chores: washing dishes, doing laundry, feeding pets and even cooking (under supervision!). It’s a great way of teaching your kids responsibility and the value of money. But, crucially, it reduces the burden on you, giving you more time to focus on income-generating and money-saving activities.

5. Plan for your future

Single-income families often focus solely on their kids and completely overlook the parents’ own longer-term needs. Invest some time in looking at your future: where will you live? Where will your income come from? What happens to your kids, home and assets should something happen to you? Consider income protection insurance too – a potential lifesaver should you ever be unable to work because of illness or injury.

6. Don’t go it alone

While you may feel isolated as a single-income family – especially if it’s you who’s no longer working or you’re a single parent – you’re really not alone. Help is always at hand. Reach out to family and friends for emotional support – they are a shoulder to lean on as you acclimatise to single life.

Tap into local parents’ support groups and other parents at your kids’ school – they know what you’re going through. You can band together to carpool, share after-school care duties and swap clothes/uniforms/toys that have been outgrown.

Also seek financial support too, from licenced accountants and advisers rather than well-meaning friends. Professional advice can help you minimise tax, claim family tax benefits, build savings and optimise your cash flow.

7. Look after yourself

Poor health will blow out your medical bills and compromise your ability to earn money. Since it’s now up to one person alone to put food on the table, your health – physical and mental – is paramount.

• Eat well.
• Exercise regularly
• Find outlets to alleviate stress.
• Check in with your doctor.

Remember: airlines tell passengers to fit your own oxygen mask first before helping others; the same goes in life too. Because you simply can’t keep your family afloat if you let ill health drag you under!

This article was originally published in Kidspot