Deciding to become a single income family is not one to be taken lightly. If both adults were working, there will be a dramatic drop in income and could have a noticeable effect on finances. Many couples decide to become a single income family with the arrival of children. With proper planning, a single income household can be just as successful as a dual income household.
The first thing to figure out is your debt to income ratio and to see if having one income is feasible at this point. The next aspect is to consider if having one income will be enough to cover any future emergencies that may happen.
Having a monthly budget and sticking to it will be the key to the success of a single income family household. Extra, non-required spending may have to be limited. Eating out and shopping may not be a regular part of the budget now.
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There’s one word that makes many individuals shake with fear…the “B” word, or budget. Many have the misconception that if you create a monthly budget, it will tie up your money in some way and you won’t have use of it.
Of course, that’s not the case at all; the budget enables us to see where our money is going. More importantly, a well-planned budget will let you get a handle on your spending so that you will know just where and how your money is spent. You’ll know how much is going for rent or mortgage, utilities, groceries, and also lunches and entertainment.
If you create a monthly budget, you’ll have a plan where you can set financial goals for your life and you’ll have the ability to see where you stand at any point in time. Besides allocating funds for the regular bills, you’ll also set up accounts for savings, investments, future purchases, as well as college for the children.
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