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Making Ends Meet On A Single Family Income

There are many reasons why a family can soon become a single family income as opposed to both adults bringing money into the family.   This can be something that is out of one’s control where as one of the individuals may have lost their job or have become ill and are no longer able to work.   Then there are those that feel that their children are suffering from both parents being out in the workforce and one decides that they want to stay home to raise the children, at least during their younger years.   No matter what the reason for the double income now going down to a single one it means that a lot of adjustments have to be made.

If you are one of the fortunate ones that are in the position where you can make a choice to reduce the income then you can pre-prepare for this. What you want to start doing is setting funds aside that are going to equal your income if you were to stay working for at least six months.   You may also want to take a few months to really try and bring your debt load down before you reduce your income.

Another alternative may be is if you are not able to find full-time income because you have lost your employment then consider part-time jobs, maybe taking two with these being equal to what you are making in one full position.

There are certain things that you can do to tighten your belt to cut down your expenses but there are some things that you really cannot compromise on.   You must make sure that there are enough funds available to meet any health care expenses that you may have that are not being covered through the government plans.   You must be sure that you are able to meet your debt load and this can be really difficult if the decision has not been yours to reduce the income.

You will have to definitely set up a budget that is workable with the one family income even if it is only for a short term.  You will most likely find that by changing some of your spending habits that you have been used to while there were two incomes coming into the family will really be a big help.

When one is forced into a single income scenario at first it can create a panic as the family has been used to living on a double income and now has to function as normally as possible with a greatly reduced income.  Chances are this will become workable but it certainly will mean most probably giving up several of the luxuries that may have been enjoyed when there was substantial income coming into the home.  If this has been as a result of unforeseen circumstances of course the focus is going to be on trying to change this situation so that the family can get back to the regular financial routines.

 

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Sam Seidman, CPA, CA, LPA
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Toronto, Ontario
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Email: sam@torontoaccountant.ca

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