How to Budget on One Income: Tips for Single Income Families

How to Budget on One Income: Tips for Single Income Families

My family has been living on one income for the past five years. This means that the income from my husband’s job sustains our lifestyle. I do not contribute much in the way of money, but I contribute by taking care of the needs of my family. This also means that I have to budget every single month because we don’t have tons of extra money to spend without careful consideration. And also because it is a good habit that helps us to save and plan for our future. 

Today I am sharing how to budget on one income. Being prepared for upcoming expenses and knowing where we are financially gives me a great sense of peace and security. If this is something you are interested in, be sure to save this post so you can come back and reference it later. You can also snag my Nesting Domestic Budget Tracker below to help keep track of your finances!

Disclaimer: Keep in mind that I do not differentiate between my husband’s money and my own. It is all ours. Just because I do not contribute financially to our family, we are still equal partners. You will see me refer to ‘your money’ and ‘our paycheck’ below because that is actually how we talk about money in my household. Please note that I am still referring to a single income household.

If you feel that you are unable to access your family’s money and it is threatening your safety, please speak to a professional domestic violence hotline. 

What is a Single Income Family?

Simply put, a single income family is a family that survives on a single person’s income. This could mean a family, like mine, with a stay at home parent. It could mean a family with a single parent. It could also mean that you perhaps had two incomes and one partner lost their job.

Whatever the case may be, it means that your family lives off of one salary, paycheck, or other means of income. 

How to Become a Single Income Household

If you are interested in becoming a single income family, you might want to check out my post on how to decide if being a stay at home mom is right for you. I share some of the important decisions we made before leaving my job (and paycheck) behind. 

After reading that, you will need to figure out what your finances are going to look like and what sort of savings you’ll need. Every family’s needs are different, so I also suggest reading my post about saving an emergency fund as well. 

How to Budget on One Income

Before getting started, gather at least three months worth of pay stubs and bank statements. The bank statement should have your income listed, but the pay stubs are nice if you want to look at taxes, insurance, or retirement that is taken out of each paycheck.

Go through the bank statements for each month and make a note of any differences in income. This could include you mom sending you $100 for your birthday or a cancelled subscription refunding you. These are not part of your regular income, but I do provide a space for them in my budget printable.

Likewise, it is nice to see more than just one month’s worth of expenses because you can see if your water bill changed drastically or you overspent on groceries one month.

Calculate Income

The very first thing you need to do in order to budget on one income is to know what you are bringing in. The benefit of having only one income source means that you usually don’t have to work very hard to figure it out. Your family’s income is going to be the after-tax amount that comes into your bank account each month.

Fixed Income

For some families, this is consistent by way of a salary. That means that the income received every month is the same. This is arguably easier to budget with because you don’t have to plan for changing amounts of income.

Variable Income

For some families, this number is different every month due to a variable income. This could mean an hourly wage, varying amounts of payment for different clients, seasonal income variations, etc… It could even be that your spouse has a salary and a side hustle on top with a variable income.

I suggest using your baseline income to budget. This means the bare minimum amount you know you’ll get each month. For example, let’s say your husband brings home $3,000 per month after taxes, but has the ability to earn $2,000 more each month based on sales. 

DO NOT budget $5,000 each month. Your budget will feel satisfactory and then fail if he misses a projection. Instead, budget based on the $3,000. Anything extra is an added bonus. If and when you do get that extra money, you can budget for it at that time. 

If you are looking for ways to cut back so that you are able to live on one income, check out my post on how to save money in order to be a SAHM. 

Bonuses

If, like my husband, you get annual or quarterly bonuses, the same rule applies. Do not budget your month based on receiving the income ahead of time. Plan your monthly budget to be just like any other. Once you receive a bonus, then you can budget for what you would like to do with that money.

We like to put it in savings because we are building our home and want to save every penny. You may choose to pay for braces, go on a vacation, or something else entirely.

Calculate Expenses

I suggest going back through three months worth of bank statements. This can give you an overview of what you are actually spending each month. Catalogue all of your bills into three categories: Fixed, Variable, and Miscellaneous. 

Fixed Expenses

These are things like your mortgage or rent, cell phone bill, student loans, or car payment. They don’t change each month, so therefore you know what the amount is you have to pay every month. I group utilities in with this group even though they may fluctuate, because they are necessities. 

Variable Expenses 

These are expenses that change, such as your groceries or fuel for your vehicle. This also includes bills that are not monthly, such as quarterly pest control or annual HOA dues. 

They may change with the season or due to your family being out of town part of the month. Perhaps you had guests which made your grocery bill go up. Maybe your kid had a lot of away games so you drove more. You get the idea.

Miscellaneous

This category is for basically everything else. Need to grab your niece a birthday present? Want to help a family at church that just fell on hard times? Maybe your kid just had a growth spurt and needs new clothes. Maybe you finally decided to upgrade that nursing bra (4 years post partum, I see you). 

We all have those innocuous little expenses that add up. There’s nothing wrong with them, but you need to be aware of them.  If you happen to notice a trend of wastefulness that is causing you to overspend (and possibly put your family in debt), we will discuss that in a bit. 

Figure Out Your Bottom Line

Once you take a look at your expenses, you can make a ‘bare bones’ budget. This is everything you have to pay for: food, shelter, insurance. This does not include streaming services, going out to restaurants, or other ‘fun’ stuff. 

As a single income family, you need to be aware of your bottom line so that you can make sure you have enough income to cover it. When my husband and I first started budgeting, I actually made two: our bare bones budget, and our regular budget. Our bare bones budget was what we absolutely had to pay for to survive. Our regular budget held some wiggle room. 

Think of it this way: if your husband lost his job tomorrow and you needed to make ends meet, it doesn’t seem like a smart choice to keep paying for takeout and Netflix when you’re not sure if you can cover the light bill. 

Our regular budget had a line item for date nights and streaming services and activities for our son. This is the budget we use on a monthly basis. However I like to be aware of our bare bones budget in case something happens. We also have an emergency fund for unknowns. 

Find Your Total

Once you know how much you are spending each month, you can subtract that from your income. You want it to be positive. For example: your family brings in $4,000 after taxes each month. Your family spends $3,500 each month. That leaves you with $500 leftover each month to save or do whatever you want with. 

If the number is negative, you’re going to have to cut back your expenses or increase your income. For example: your family brings home $4,000 after taxes but you’re spending $4,500 each month. That leaves you -$500 each month. If this is the case, it is usually easier to cut back expenses than increase income, at least at first.  

I’ve got some great posts on saving money, you can check them out below:

• Saving Money Around the House
• Saving Money on Kid’s Clothes
• Saving Money With a Garden

Creating Your Budget

The great thing about creating a budget is that you can make it whatever you want. Want to spend $100/month on pedicures? As long as it fits in your budget, go for it! By knowing where your dollars are going, you are more likely to be able to spend without going into debt. 

Nesting Domestic Budget Printable 

I’ve created a simple monthly budget printable to help you get started on your family’s budget. It includes space for your fixed expenses, your variable expenses, and wiggle room based on your specific family’s goals. 

Under variable expenses, you have space for groceries, restaurants, entertainment, etc… These are all monetary items that can change, depending on what is going on in your life. 

Budget for Your Lifestyle

If you know your kid has music lessons or a team sport each month, make sure you account for it in your monthly budget. In the right hand side of the printable, you’ll see a space for recurring or unusual expenses. This could mean violin lessons or a quarterly pest control bill. Make sure you account for everything your family needs to account for in this section.

Savings & Investments

In the right hand column, you’ll notice an area for savings. I think it is *extra* important to have an emergency fund in place when your family has only one source of income. We have had a line item to add to our emergency fund each month for as long as I can remember. 

Now that our emergency fund is fully funded, we’ve continued to save that amount of money each month, but it is now going towards savings for non-emergencies (in our case, building our forever home). 

I also like to keep track of where our retirement is at, so I included a line for the running total of that as well. 

Debt Payments

In this day and age, it is rare that a modern family has no debt. From student loans to credit cards to car payments, it is a pretty unfortunate commonality. I’ve included space to keep track of your debt repayment totals on the Debt Tracking page and a space on the budgeting page for a total amount. The Nesting Domestic Debt Tracker gives you the ability to track each debt you have, and see at a glance the progress you’ve made over the course of a year. 

Grab Your Nesting Domestic Monthly Budget Printable from my printables shop today!

Savings Tracker

Likewise, once you have paid off those debts (or if you simultaneously want to pay off debt and save), I’ve included the Nesting Domestic Savings Tracker. I currently use this as we save to build our forever home. I have also used it for saving up for a new car, and previously to track our emergency fund. You could use it to track your savings progress for hospital expenses, a new boat, or anything else you want to save for!

Conclusion

By allocating your money, you are aware of how much you have to save, spend, and even splurge now and again. It can be tricky for single income families to make ends meet sometimes, so be proactive and know where your money is coming from and going. 

Do you track your monthly budget or need to budget on one income? If so, let me know in the comments below what works well for you!