Singing the single income sankey
FOR most families, losing their second of two household incomes would be a potential nightmare. After all, when you can barely keep things afloat while getting all that you need done, losing such a valuable resource can be catastrophic. Unfortunately, sometimes, the unfavourable happens, and when it does you have to be prepared to pick up the pieces and get back on the horse.
The transition can be intimidating, but the good news? Many families have done it before and are doing it. So while your partner job hunts, there are a number of tough decisions that you will need to make as a family so that you don’t incur too much debt, if at all.
Banker Vaughn Levy shares just how to prepare to make this huge adjustment.
Set a new budget
You will have to revise your budget and actually stick to it. Make sure to include all known expenses, then prioritise. For example, you will need to make allocations to food, rent, utilities and loans or other outstanding debt. This guarantees that you take care of your needs first. If you can, include a little for leisure, but instead of paying for entertainment, consider arranging a family movie at home, or trading a picnic for eating out. You will need to cut back in as many areas as your budget allows.
Use your emergency fund as a buffer
Financial advisers always recommend that their clients have an emergency fund. This is for situations like this one where a job loss is at play. It reduces the anxiety that couples experience because at least there is a little money saved to help to reduce the burden while the other party job hunts.
Forego paid childcare services
Childcare is often quite expensive. So perhaps instead of continuing with existing paid childcare arrangements, since one parent is home, they can take charge of childcare duties on days when they don’t need to physically job hunt or have interviews. If possible, on the days that they have interviews, enlist the help of a responsible, reliable friend or family member to assist with childcare where possible so that you can save.
Don’t abuse credit cards
Sometimes people forget that the money they use when making purchases with credit cards will have to be repaid. If it’s not paid when due, it attracts interest that will only continue to climb. Put your credit cards away and only use them if absolutely necessary. This way you won’t incur debt you don’t know how you will immediately pay back, or that you will have to make great sacrifices to repay.
Buy wholesale
Consider going grocery shopping once monthly. Buy a month’s supply of all you need. For now you may not be able get the luxury brands that you like, but wholesales, as opposed to supermarkets, may be better if you are looking for a bargain when buying bulk.
Do more DIYs
Sometimes when we don’t have time we spend money to get someone else to do the work, or we buy things that we could have otherwise made. To save on money you may need to pass on having your housekeeping coming in until you are back to a two-income household, for example. And instead of taking your daughter to the salon you may need to comb her hair at home. Other activities like polishing your nails, washing your car, grooming your son, etc, are things that you are capable of doing yourself.
Look into side hustles
You may not get a job immediately, but if you can get a side hustle then grab it. Chances are you will have a lot of flexibility and it would be a good way to supplement your partner’s income. It will make things much easier for your family, so take advantage of your talents.
You will need to make tough decisions
Sometimes it will take longer than you expected to get another job. The absence of the second of two paycheques can be financially draining, which means you may need to make other cuts such as selling the family’s second car, replacing it with something older, or renting it. Each option can bring in some extra cash to the family while you continue to job hunt.
