In the world we live in today, everything is getting more and more costly. As a result, most families need numerous or more than one earning member. In the case of families having a single income source or earning member, things are quite different.
Starting from the source of income, to expenses and budgets, a rigorous planning is necessary. Even if the source of income is huge, proper money handling is very important. Here are some effective money hacks for one income families.
Hack 1: Proper budgeting and expense tracking
The first thing to do as a one income family is create a budget. The budget must be according to the level of income. While making a budget, it is sometimes important to cut corners. The budget should primarily focus on the daily needs and expenses. Make sure you do not add anything unnecessary to the budget.
To make sure that you don’t spend out of budget, tracking or keeping records is crucial. You must keep a record of every single expense. In addition to that, keep track of every bit of money, whether it is earned, saved, or spent.
Hack 2: Savings are always helpful
After spending according to the budget, there is a good chance of having an extra amount of cash in hand. In such cases, the wisest thing to do is save that money. However, it is not wise to consider leftovers as savings.
The smart thing to do is setting aside a certain amount from the monthly income. As a result, some cash automatically builds up. However, upon acquiring large savings, the chances of spending on a frenzy rise in many. In such scenarios, the issue of emergency expenditures must always be considered. Savings can be great blessings in times of emergency. For example, in cases of medical emergencies and huge-scale debts, savings can remove the burden of expenses.
A very significant form of saving is investing in life insurance. It ensures the security of the non-earning members of the family, in the event of the earning member’s death.
Hack 3: Sort out major expenses
Like daily needs and expenses, the major expenses require severe attention. Major expenses can comprise debts, taxes, mortgages, or any form of debt. If a person having loans is the only earning member, his or her death will put the other family members in a huge problem.
As a result, paying off debts is a great issue for one-income families. In addition to that, expenses such as school fees, and medical bills also fall in the category of major expenses. However, major expenses vary from one family to another.
Hack 4: Be tactical while spending
Spending according to a budget is not the only way of reducing expenses. Being tactical makes it much easier. Avoiding home deliveries is a good way of reducing costs. Instead of being lazy and ordering online or via phone, getting the parcel yourself is a good way. However, there are always exceptions.
Avoiding credit cards is also an effective method. Credit card charges and debts can easily cause a person to run low on cash. Completely avoiding credit card usage is not mandatory. As mentioned earlier, tracking is crucial here. As for credit card debts, one must treat them as a major expense.
In day-to-day expenses, you have to be very strategic. For instance, instead of buying vegetables, and dairy products from a super shop, you can go to the farmer’s market. This way one income families can afford the same things, but fresher and at a lesser price.
The Bottom Line
One income families do not necessarily need to lead a very strict life. All it takes is to be strategic and cautious. Pre-planning and these money hacks for one income families can help family live a more disciplined and comfortable life.
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