1. Determining your Budget

Ad

Determining your budget is the first and foremost thing you need to do when you have a single income. Be realistic about how much you earn, how much you spend, and how much you can save. 

Make a record of your household’s income if you want to live on one effectively. Take a paper and write down all the necessary expenses you have on a monthly basis. This usually includes:

  • Rent or mortgage;
  • Groceries and household supplies;
  • Monthly bills;
  • Health care insurance;
  • Transportation costs, including gas, insurance, and minor repairs;
  • Child care; 
  • Extra expenses like clothing.

Also, consider having some side income sources you can include in your assets. This can be some extra money from a side business you can work from home or dividends from equities.

Once your “fixed” or “necessary expenses” are paid, you will see how much cash you will have left. This can be used for a weekend breakfast with friends, a trip to the theme park with the kids, or other reasonable indulgences. 

But you don’t want to spend all of your money. You also want to set aside some for debt repayment and savings for other things, like retirement or an emergency fund. You can use online tools to track your expenses more easily. Also, you can download money-tracking apps that facilitate budget creation to speed up the process. 

Ad

Scroll to Top