How To Live On One Paycheck

Today’s article is written by Jon Dulin  from Money Smart Guides.

Living on one paycheck is a thought that many dual income households don’t think about. The reason is because it is often thought of as unachievable. Many households are struggling just to get by with two paychecks, so how could they live on just one? Fortunately, there are ways for dual income households to cut down costs and learn how to budget for a one paycheck lifestyle. It requires a lot of work along with a lifestyle change, but if this is something that you want to do, the rewards can be tremendous. Below is a guide to help you learn how to live on one paycheck.

How To Live On One Paycheck

How To Start

The idea of living on one paycheck can be daunting for dual income earners, but it shouldn’t be out of reach. The process does require work and for many, a complete lifestyle change. To start out becoming a one paycheck household, couples will need to evaluate their priorities. Why do you want to live on one paycheck? Starting a family is the number one reason why dual income couples want to live on one paycheck. You need to decide if you want to become a single paycheck household when you first talk about starting a family. Providing yourself time to make the change is the best thing that you can do. Once you answer why you want to live on one paycheck, you next need to look at where your money is currently going each month. Do you have a mortgage that takes up too much of your income? Do you have other forms of debt? Do you own cars that are not paid for? These are all things that need to be addressed. Be sure to write these down so that you don’t forget anything.

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Create A Plan

As with most things financial, planning is the backbone to becoming a single income household. It is much harder for those that are already struggling to live on two paychecks to cut down to one. If you are thinking that this is where you want to end up, then plan for it early. One of the first things those should do is to pay off debt. Debt is always going to be a hinder on personal finances. How can you get it paid off before you cut down to one paycheck? Do you need to get rid of one car? What about downsizing your home? The best way to make this work is to be content with less. Big homes, expensive cars, and useless spending are not possible when working toward living off one paycheck. Again, your plan should include how to not only get rid of debt before you transition to living off one paycheck, but also address the areas where you will be cutting back so that you can afford to live off one paycheck.

Following Your Plan

Once you come up with a plan to achieve living on one income, you have to stick to it. You can’t treat this new plan like a diet in the new year. As stated before, living on one income is a lifestyle change and it takes time. The key is to take things slow. As you slowly pay off debt, slowly wean yourself off of the second paycheck. Learn to live on just 75% of that paycheck. Once you do this for a few weeks, scale it back to 50%, then 25%, eventually getting by without living on the second paycheck at all. While you are doing this, be sure to save the money you aren’t living on. In other words, if you are currently living off 75% of the second paycheck, take the other 25% and just save it. This will help you in the event of an emergency or through any tough times ahead. The reason why you want to do this is because you are going to make mistakes. Completely changing your lifestyle doesn’t happen overnight. You slowly adapt to it. By slowly removing the second paycheck from the mix, you adjust more easily. In other words, it is less of a shock to you and you will be more likely to stay the course.

Be Flexible

You created a plan and started following it in order to make your dream of living off one paycheck come true. What happens when life throws a wrench in your plans? Typically, when households are living on one paycheck, one emergency can really derail the outcome. Life doesn’t usually follow the plan you have spelled out, so when you want to live this lifestyle, you need to be flexible. Coming up with contingency plans in order to keep the one paycheck lifestyle is imperative. You may have to cut off savings for a few months to cover unexpected bills. Or, if one spouse is no longer working, you might have to look into a part-time job. The more flexible you can be, the greater your chances for long-term success. Of course, the more you have in savings also helps in long-term success. Again, this is why you need to cut out needless spending as much as possible.

Final Thoughts

Living on one paycheck is possible for dual income earners. You have to work toward debt freedom, stop lavish spending, and communicate with each other. Making this change is not just about reducing expenses, it is about changing your lifestyle and it takes time and sacrifices by both people. As stated at the beginning, this lifestyle is not an easy one to achieve, but if you can push through and make it happen, the reward for doing so is tremendous.

Author Bio: Jon writes for Money Smart Guides, a personal finance blog that is dedicated to helping people get out of debt and start investing for their futures. To help people get out of debt, he has an eBook, Spare Change, which provides readers over 150 ways to cut everyday expenses so they can apply more money to their debt each month, helping them to become debt free faster.

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Leave a comment

  1. says

    We lived before on one paycheck, my hubs were the only one working because I need to take good care of our only daughter. But now that my daughter has been already seven-year old, I’m very thankful that online job does exist and I’m working from home now.

  2. says

    When we had kids we were slapped with huge daycare costs, so when we had our second we decided for my wife to stay home. It was tough going to one paycheck but as you pointed out we devised a plan and stuck to it. It also helped tremendously that we were debt free.

  3. says

    To live on a single paycheck must be difficult. True, major sacrifices have to be made. But if it’s achievable, that would be great! What a saving for dual income earners that would be.

  4. says

    @Stefanie: My wife have found that to be true as well. Our expenses haven’t really increased since we’ve moved in together.

    @Money Beagle: This the way to do it. Learn to live on one income before the kids come along. Life will be stressful enough with them running around, might as well take some of the stress around money out the picture.

    @Little House: Doing this with an irregular income can be tough. You’ll just need to have a larger emergency fund to cover you in the months when the income is lower than expected.

  5. says

    My wife stays at home with our young kids, so we live this every day. She did work before we had kids, but what was the key for us is that, once we were ready to start a family, we started removing her income from the monthly budgeting. By the time she left, her income was not required for us to meet our obligations or to support our lifestyle, so it was practically a non-event when she quit.

  6. says

    I’d really like to live off one pay check. I think we might be able to do it by the end of this year or early next, but the difference for us is that the second pay check is more erratic. However, if we could get our basic expenses down, I think we could stash the erratic/irregular income away for retirement and live off the more stable pay check. But in order to do this, we need to be almost completely debt free!

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