Thursday, April 28, 2011

Living on one Income

I little while ago a friend was asking me how we manage to get by on one income and support 3 kids. Him and his wife were thinking of having kids but were concerned about going from two incomes to one. So in reflection here are some things that have made this season of life (being a one income family with young kids) doable for us.

1) Have low or zero debt levels except for a mortgage. We even went the extra step last year of replacing our credit card with a debit card even though we would pay the balance off in full each month.

2) Budget. There are heaps of online tools that will help with creating a budget. Living by it- well that's a work in progress I think.

3) Spend less than what you earn. IE save!!!

4) How to spend less?
* Cut down discretionary spending. Hobbies, (who will have time after having kids anyway), alcohol consumption, gym membership etc.
* Get the best deals on phone, Internet, mobile, insurance etc. Regularly review what you are paying and whether there is a better deal out there.
* Buy second hand if possible and use cash!
* Hold on to things. Who really needs to update their furniture or car every few years?
* Buy quality!
* Research, research, research when making major purchasing decisions! That's my husband's strong point and where I have gotten into trouble a few times.
* Cook your own meals at home and have some easy meals available as an alternative to takeaway. We are still working on this one.
* Develop an attitude of contentment. Focus on expressing thankfulness for what you do have regularly.

5) Give a proportion of your income away even when you think you can't afford to. I believe giving helps us to have less attachment to stuff, appreciate what we do have and what really matters in life, our relationships. It also helps us to honour our responsibility to help the poor in our world.

6) Cultivate an attitude of learning. Read about finances, learn from other families, utilise websites such as Simple Savings.

Disclaimer: Let me say though that this journey isn't always easy and sometimes we think about being in a different situation. But the benefits of raising our kids at home while they are young is worth it for us.

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