How to Live on One Income

5 STEPS TO LIVE ON ONE INCOME AND BE A STAY AT HOME MOM

Having a baby can mean a lot of changes. Many women who had every intention of returning to the workforce regret not being able to stay home with their little ones once they arrive. I’m here to tell you that it is entirely possible to become a stay at home mom without going bankrupt. It takes a little planning and dedication, but it is totally doable! Check out my 5 steps to live on one income and be a stay at home mom.

Make a Budget

If you don’t know where your money is going every month, how are you going to know if you can afford to stay home with your baby? You wont! It is really easy and makes taking control of your finances SO much easier. Here is a quick and dirty way to figure out a budget that works for you:

Take a look at your bank statements for three months or so. You’re looking for your total monthly income and your total monthly expenses. Its important that the expense number is LOWER than your income number. If its not, get that spending under control before going any further. Next, you’re going to want to take a look at where your money is going. you may be surprised to find that you’re spending hundreds of dollars on restaurants every month, or that your childcare expenses are the biggest hurdle in your budget.

Look for any areas where you can cut back. Bonus points if you immediately throw that surplus into an emergency fund for a rainy day! The goal is to lower expenses – more on that below – enough to where you are only using one salary (hopefully, your spouse’s, if you are the one planning to stay home!). Next, I’ll go into actually creating budget categories.

Track Your Budget

Gather your bank statements from the past three months or more. For me, I like to use a pen and highlighter and work my way through the statements on paper. You may prefer to use digital statements. Do whatever works best for you. Go line by line and highlight your actual must have expenses. These are things like your mortgage, your electricity, fuel for your husband to get to work. Tally those up for each month, and notate it for future reference.
In a different color, highlight must haves with wiggle room. These are things like your grocery budget, your car note, your cell phone plan. These are areas where you can modify how much you spend. We all buy snacks and extras when shopping, but if you look hard, you may be able to find some items you don’t really need to buy. I like to keep my grocery receipts so that I can look at what was necessary and healthy for my family and how much we spent on junk food. It can be a total reality check. We will talk about your car note and cell phone plan in just a bit. Tally those items up and write them down next to your must haves.
Finally, comb through any expenses not yet highlighted. Are there any irregular bills? If so, you can plan ahead for them so that you are not scrambling to pay them when they come up. Everything else should be an unnecessary expense. These are things like shopping sprees, eating out regularly, upgrading your phone plan. In other words: things you don’t need.

While it might be nice to have some of those, you are here because you are looking for ways to stay home with your precious babe. And cutting out those extras will get you that much closer.

Assess Your Spending Habits

Shop around for a better (read: Cheaper) deal on your cell phone service.

Pay attention to your online shopping. It is so easy to just Add to Cart without really weighing whether we need the item or not. Leave it in your cart for a few days or even a week. Chances are, if you go back a week later, you wont really have the urge to buy it. You’ll have either found a solution without buying it, or you know for sure that you need it. Win/win.

Call your internet provider and see if they are running any specials or have any discounts for customers who pay on time. If they don’t, shop around to see if you can find a better deal.

Limit restaurant visits and takeout. This one is self explanatory. You can make it cheaper (and probably healthier) at home.

Cut Expenses

Most people have some miscellaneous items that they are spending on every month that they don’t actually need. Things like subscription services, eating out, weekly manicures, etc.. Once you have your budget, you can better identify those wasteful items. Your goal is to live on one income, so while it may sting, cutting these expenses will help you get there.

Get Rid of Streaming Services

Do you really need four ways to watch your shows? Especially once baby arrives, you are not going to have time for all of them. Keep one, ditch the others.

Slow Down on Expensive Hobbies

As a new mom, you definitely need an outlet every now and then. Don’t get it twisted, I am not saying you need to give up your hobbies. But running is a lot less expensive than scuba diving. Knitting is cheaper than cosplay. Baking is cheaper than car racing. You get the idea.

Downsize Your Home

Less square footage means less utility expenses and a lower mortgage. It also means less to clean and take care of. All you really need is enough space for you, your partner and baby. Maybe a guest room if your family lives out of town. Moving to a lower cost of living area can also greatly increase the space between expenses and income.

Purge Your Stuff

Sell things you don’t need on Facebook marketplace. You can make some quick cash and get rid of unneeded items without them ending up in a landfill.

Look for Higher Paying Jobs

This is for the spouse that will continue to work after the baby is born. You can only cut expenses so much, but you can raise your income infinitely. Look for jobs similar to yours in better fields. For instance, if you are working in communications for a non-profit, look for communications jobs in the tech industry. You are almost guaranteed to find better paying positions.

Shop Second Hand

Buying clothes and other items is a great way to save money on things you actually need. You can also get a ton of baby items that way too! Thrifting is even a hobby for some. Plus, you’ll possibly need a whole new wardrobe after your baby arrives.

Cut the Gym

This is a controversial one for me. I believe working out is absolutely important for your overall physical health, as well as your mental health. It is the best stress reliever I know of. Not to mention, many gyms (including my own) have childcare available while you work out.
There are free ways to work out. Such as running, finding workouts on YouTube, yoga, or hiking.
If you really can’t give up your gym membership, try shopping around for more cost effective options. Some gyms have a lot of extra frills that you pay for and don’t necessarily need. If you really want to live on one income, it may be worth it to you to ditch the expensive membership.

Assess Your Vehicle Needs

Do you actually need both of your cars? Do you have two car payments? The average car payment in 2023 was $726 per month. If you didn’t have that payment, that’s over $700 you don’t need in order to cover your expenses. If you have two car payments, that’s over $1400 each month!!! Getting rid of just one of these significantly helps lower your monthly expenses.
Assess the area in which you live. If your spouse takes the car to work for the day, would you be stuck at home? Are you close enough to local transit? Can you walk to a park or grocery store? For us, we are not close enough to those things, but because my husband works from home, I have access to our vehicle if I need it. It is rare that we need the car at the same time, because we are usually going to the same place! While it can be nice to have two vehicles, the goal here is to live on one income, and most single incomes cannot support two car payments.

Save Aggressively

Do you have an emergency fund? If not, trying to live on one income is definitely a good reason to have one. Having money stored away for those unexpected trips to the doctor will make you feel more secure in your decision to stay home.
If you can afford to do so, start a sinking fund for your birth. Hospital bills can be stressful if you have no idea how you are going to pay them off. Planning in advance can save you from having to go into debt to pay it off.

Test it Out

If you don’t have an imminent deadline (i.e. you are not pregnant yet), try living off of just your husband’s income. If you are able to completely survive on his salary alone, you know you’ll be able to do so once baby arrives. Bonus: you can just sock away all of your take home pay to beef up that emergency fund or to be prepared for hospital bills!

If you are still unsure of you are going to be able to live on one income, there are some other options:

Change Jobs

• Switch to part time work instead of going back full time.
• Depending on where you work, you may be able to negotiate a part time position. Speak to your manager or HR department. If they are willing to work with you, this could be a great option to still bring in some income while still getting to spend more time with your baby.
• Find a job that you can bring your baby to.
• I used to work for a non profit gym that had on site childcare while you worked out. Employees were allowed to bring their own children while they worked. This meant they could still get a paycheck but had the majority of their time free to spend with their kids.
• Babysit your friends and neighbors kids. You can have them come to your house or go to theirs with your baby.

Pick Up a Side Hustle

• Wait tables on the weekends when your husband is not working
• Uber, Lyft, Door Dash, Instacart, and Rover are all great ways to pick up some extra cash without having to sacrifice your days with your baby.

Review:
Make a budget
Track Your Budget
Cut Expenses
Save Aggressively
Test it Out

Let me know if you’ve been successful in transitioning to being a fulltime SAHM or if you DO live on one income in the comments below. I’ve been at home for the last four years and I am just now hitting my stride. It will take forethought and planning, but you CAN do it. I am rooting for you! You will not ever regret having the time to spend all day with your baby.

PS: If you are looking for tips on helping your household run smoothly, click here.