12 Strategies For Living on a Single Income

Figuring out how to live on one income, either by design or circumstance, can seem daunting. And it may put a lot of financial pressure on that one wage earner.

But did you know that almost half of all American households live on a single income? While 53.3% of Americans are dual-income according to the latest federal data, that leaves 46.7% as one-paycheck households. There’s strength in those numbers, proving that it can be done.

If you are learning how to live off one income, read on for 12 smart strategies that will help you make the most of your money and live well, including:

•   Making a realistic budget

•   Reducing food expenses but still eating well

•   Downsizing your home

•   Earning extra income

•   Focusing on what you have.

Is It Possible to Live on One Income (After Living on Two?)

Maybe you or your spouse is now a stay-at-home parent, you’re caring for an elderly relative, or one of you lost your job.

No matter the reason, stepping off the full-time work wheel appears to be trending. The U.S. Census Bureau’s latest report reveals that the number of full-time, year-round workers dipped by about 13.7 million in a single year. The COVID-19 pandemic likely played a role in that, but it does indicate fewer people in the workforce and potentially a rise in single-income households.

While today, dual-income households hold a slight majority, single-paycheck households can sail smoothly. Think of how many of our ancestors navigated life with one breadwinner per family. It is indeed possible to survive on one income and even thrive.

12 Tips for Living on a Single Income

How to make it on one income? Start with a newly streamlined (but livable) budget and move on to other changes one by one.

1. Making a Budget

First step, reality check. To successfully live off one income, document your household’s take-home pay. Also take stock of the kinds of income you could count among your assets, such as money you might earn from a side hustle or dividends from any stocks you might own.

Then, tally all expenses that are musts, such as:

•   Mortgage or rent

•   Groceries (even that annual Costo membership fee)

•   Health insurance costs

•   Transportation, such as car payments, gas, insurance, and repairs

•   Utilities

•   Child care

•   Work-related expenses (commuting, clothing, etc.)

Discretionary income is what is left after your “fixed” or “necessary expenses” are covered. This would be money to use on a weekend brunch with friends, taking the kids to the theme park, or other moderate splurges. But you don’t want to spend all of that money; you also want to allocate some towards paying down debt and saving towards other financial goals, such as an emergency fund or retirement.

To streamline the budget-making process, you may want to use an online tool (many banks provide them) or try an app that helps with this process. If you’re raising kids on your own with one paycheck, it can be especially important to learn how to budget as a single parent.

2. Freezing Extra Food

This can save a lot of dough and consolidate your food prep time, too. Take a few hours a week to cook foods that freeze and reheat well, such as lasagna, chili, soup, or pot pie. Bake and stash muffins and bread for weekday or game-day breakfasts. The homemade food you prepare is likely to be more wholesome (no preservatives) and less expensive than store-bought.

To make freezing a breeze, make sure you have some containers and foil wrap on hand; then use masking tape or stickers to mark and date contents and reheating instructions.

3. Transitioning to One Car

Becoming a one-car household is not only better for your budget (gas, insurance, new tires, car repairs) but it helps the planet, too. Perhaps your partner can take public transportation to work and leave the car home for grocery runs, doctor appointments, and shuttling kids.

If one of you has to drive to work and thereby leaves the other without wheels, drill down on clear communication and scheduling. For instance, you need the car back by 6 p.m. to make a meeting. Otherwise, you might take public transportation or call the occasional Uber to get places. Carpools can also work for kids’ activities and work commutes.

If you’re a newly single parent balancing car costs along with everything else, create a reasonable post divorce budget to guide you. Transportation is often vital but can be delivered at a nice price.

4. Monitoring Utilities and Electricity

Saving money on utilities is increasingly easy with tools like smart thermostats. Lower it when the family is out (say, during school hours) and at night when everyone is under blankets in winter. In summer, keep the house warmer if you’re at work; no need to cool an empty house.

Keep maintenance appointments for your home’s heating and cooling systems; just like a car, it needs tune-ups to run best. Teach the whole family to switch off lights and T.V. when they leave a room. Target “phantom” energy use, which is the energy appliances (especially electronics) use when “sleeping” but still plugged in. These dollars add up.

5. Downsizing Your Home

If you’re living on one income and housing costs are eating up a big chunk of your budget (which is common in this hot housing market), you might want to consider moving to a smaller house, apartment, or condo. You’ll be on trend with the tiny-house movement and the shift toward minimalist living.

When you shrink your footprint, you generally save money on property taxes, utilities, electricity, and lawn and snow care. In most cases (depending on location), the smaller the space, the lower the bills. All of this can feel freeing.

Another way to downsize (though not literally) can be to move to a home with fewer amenities or one that’s in a neighborhood a bit farther away from downtown. You may be able to get the same square footage for less.

Recommended: What’s Net Worth vs. Income?

6. Doing Meal Planning and Buying Groceries on Sale

Even on a budget ,you can eat well — even better than grabbing unhealthy, overpriced takeout. Plan meals around what’s in your pantry and what’s on sale each week. It can be fun to explore the budget-priced recipes online; plenty of sites have “meals under $10” and similar categories to help provide inspiration.

You might enjoy scheduling meals by day of the week (Meatless Monday, Taco Tuesday, and Sunday Roast Chicken are a few examples), and shop based on what’s in season and on sale. Summer tomatoes (maybe from your garden) yield gazpacho or homemade spaghetti sauce. Winter vegetables like carrots are perfect for roasting and or adding to soups.

7. Paying Off High-Interest Debt

High-interest debt, the kind you accumulate on credit cards, can have steep interest rates (they’re currently ranging from 15% to 19% in many cases). If you carry a balance, that means everything you buy with plastic is costing you significantly more than what the receipt says because you take on that hefty annual percentage rate (APR).

If you’re dogged by this kind of debt, work to control any impulsive or compulsive shopping. You might try to negotiate a lower interest rate with your credit card issuer, or make the switch to a balance transfer card, which offers no or low interest for a period of time. A personal loan at a lower interest rate can also help consolidate your high-interest debt.

Recommended: How Does APR on Credit Cards Work?

8. Getting a Roommate

Sharing housing expenses by renting out a spare room can immediately free up funds in your budget. And you might like it. Many people get a budget boost by sharing the costs of rent, laundry detergent, coffee, utilities, and the cable bill. And you may also like having an additional member of the household with whom you can chat and bond.

9. Using Credit Cards Responsibly

The old rule still holds: Don’t use credit, generally not even for gas or food, unless you can pay off the balance every month. If not, you will incur interest that will build and build.

Before making a big, unplanned purchase, you might try the wait-and-see method, which means walking away for anywhere from 48 hours to 30 days (it’s your choice), and then seeing if, after some time has elapsed, you still feel you have to have it. In many cases, the desire has faded.

Still having trouble with debt? Consider working with a non-profit like the National Foundation for Credit Counseling (NFCC ).

10. Earning Extra Income

Another angle on being a single-income household is to see how you might bring in more money. It’s not just side hustles (moonlighting as a writer or web designer, for instance) or cleaning offices at night after your full-time job at school.

Consider new ideas for how to create your own passive income, from rental properties to advertising on your car.

Recommended: Ways to Create Residual Income

11. Finding a Travel Buddy

When budgeting for single-income life, you don’t have to give up vacations indefinitely. Instead, find ways to save money on travel. Whether you’re visiting the West Coast or the Mediterranean, sharing a hotel room or Airbnb with a friend brings big savings.

A travel buddy can also chip in for the rental car, gas, toll, park entrance fees, and taxi/Uber costs. Many tours and trips offer more economical shared rooms and charge extra for private rooms. Or you could consider camping with a friend or family member; that’s another great way to enjoy an inexpensive getaway.

12. Focusing on What You Have

As you trim expenses and get into your groove as a one-paycheck household, don’t lose sight of the gifts you have, riches that can supersede a second income. That includes more family time, good health, companionship, a roof over your head, heat, food in the freezer, a car that runs. Remember, wealth comes in many forms.

One last tip: If luxury-focused social media accounts are making you feel as if you’re missing out on the good life, unfollow them! Most are unrealistic representations that fail to reflect real life.

The Takeaway

Learning how to live on one income after having two may take practice and require some smart budgeting hacks, but it can be done without major deprivation. By experimenting with a variety of strategies, you’ll find the ones that work best for you, financially and personally. You’ll also likely feel a surge of pride when you hit on the right combination of moves that lessen any money stress and enhance your financial wellbeing.

SoFi can also help you make the most of your money. Try banking smarter with our linked Checking and Savings account, which lets you spend and save in one convenient place. And when you open an online bank account with direct deposit, you’ll earn a competitive APY and pay no fees, which can help your money grow that much faster.

FAQ

How do you budget for a single income?

To budget for a single income, start with the take-home earnings you will live on and subtract essential expenses, such as a roof over your head, food, debt, and health insurance. Then look at wrangling your negotiable costs, such as owning one car vs. two or how much you budget for meals, to make ends meet. An online budgeting tool or consumer finance app can help.

How many families live off of one income?

An estimated 47% of family households live off one income, according to recent U.S. Census data.

What is the average income for a single person in the U.S.?

The median annual income in 2021 in the U.S. was $45,760, according to government data.

Photo credit: iStock/insta_photos

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOBK0722013