Tips for shifting to a single-income household

A spike in single income households looms as COVID-19 ravages jobs and families. Single incomes also stem from breakups and new babies, and financial advisor and author Helen Baker says cutbacks will be necessary.

If you have a household budget revisit it, and adapt it to your changed circumstances, she says. If you haven’t got one, now is the time to start.

Baker says single income parents should learn to say no to children who are accustomed to a previous standard of living, and should review all bills. Shopping around can deliver substantial savings on things like insurance, mortgage rates, phone and energy bills, she says. You may not even need to switch, simply ask your current provider for a better rate in line with what competitors offer.

Don’t try to go it alone Baker says, reach out to family and friends for emotional support. Seek financial support too from licenced accountants and advisors, rather than well-meaning friends.

Sort my money founder, David Rankin says, COVID-19 is delivering a double whammy on jobs and families. One of the main causes of relationship breakups his financial stress. And the key outcome of COVID is financial stress. He says his top tip for living on a single income is to make diary notes of regular expenses to avoid getting caught off guard. Diarise electricity bills, gas, mobile phone internet council rates for registration and birthdays, even if it’s just $20 for a nephew. Rankin says building an emergency fund to cover unexpected expenses is impossible for many single income families. So Rankin suggest having a credit card with a $1,000 limit if you won’t be tempted to load it up. If you can trust yourself, a credit card with a $1,000 limit just gives you peace of mind, he says.

This article was originally published in the Herald Sun Finance section