Staying solvent in a one-income household
MANY Jamaican households run primarily on a single income. Whether it’s the single parent who receives no financial support from the other, the breadwinner who goes to work while his partner takes care of the home, or the young professional who is caring for her elderly parents — we find a way to make the dollar stretch to care for those we love.
Oftentimes, however, these households are strapped for cash, and the person whose income is stretched to cover all the living costs of the family can feel burdened or overwhelmed. You need not despair, however, as financial advisor Ellice McFarlane says it is possible to stay solvent on a single income — and you don’t even have to keep living paycheque to paycheque.
She gives these tips that will help you to not only cover basic expenses, but eventually create wealth.
Budget everything
“It may seem impossible for you to budget if you are living hand-to-mouth, but that is especially when you need to stop and analyse your expenditures,” she says. “Take a look at what you can cut back on. Is it necessary for you to have both cable TV and a Netflix subscription? Would it be more economical to move into a smaller home? Do you need fast food every Friday night, or can you make it a cosy family night instead? Would it be better to invest in a can of coffee for yourself instead of purchasing a cup at work every morning? When you write down your spending habits over time, you can spot new opportunities to cut costs.”
Find ways to supplement that income
“Not everyone will be able to do this, but oftentimes, it is possible to have a little side hustle as well as a job,” the financial advisor notes. “I know many people who rent a room in their house to someone; bring their neighbours to work and back home for gas money; sell jewellery and cosmetics to their co-workers; and even sell food that they made at home. The point of the side hustle is not to provide an income per se, but to cushion your single income when things get rough.”
Start a home-based business
“If someone stays home all the time, you may want to consider a small business for them such as a babysitting service, hairstyling, dressmaking or snack shop, depending on what their skills are and what they can manage. This creates a feeling of independence and eases some of the burden off your shoulders to provide for the family. If the business does well, you may very well find yourself not being in a single-income household anymore,” she points out.
Shop wisely
“When your money has to go a long way you want to ensure that you are getting the best value for every dollar spent. This means buying grocery that you need regularly in bulk, and shopping where the prices are best, which is not necessarily the closest supermarket to your house. Every dollar saved is a dollar you can spend another day,” McFarlane says.
Ensure that you are insured
“Single-income households are the most vulnerable with the sudden passing of the main breadwinner, or any event that causes them to be unable to work,” she says. “It is crucial to have coverage in the event that something should happen to you. Speak with your financial advisor to find out what plan is best suited for your family and your budget.”
For further information you may contact Ellice McFarlane via e-mail at ellice_mcfarlane@sagicor.com.
