How do I budget for a single income?

Transitioning to a single income can be challenging, but it doesn’t have to be overwhelming. Creating and sticking to a budget is a powerful way to take care of yourself and your family.

Know your income
First, you have to know your income. That could be more than just your paycheck. Use a spreadsheet to record all your income sources. Remember to include everything that’s applicable:

• Your paycheck  

• Regular spousal or child support payments

• Social Security payments

• Income from real estate or other investments

• Any other income, such as residuals or licensing fees

If you have any lump-sum payments, like equity from a home sale, you can talk to your financial professional to come up with the best strategy.

Need to have vs. nice to have
Next, review your spending. Grab a highlighter and your bank statement and highlight all your “need to haves.” Then you’ll have to be honest with yourself about cutting back. 

Spending less can be tough, especially with children. However, accumulating debt to maintain your old lifestyle isn’t sustainable. Take this time to establish new family traditions, like making pizza at home instead of going out. Or take a “staycation” and explore your hometown during a school break.

When it comes to your own lifestyle, you may be tempted to slash all personal luxuries. But be sure to make time to care for yourself. Even if your budget is tight, you can find free events at your library, enjoy admission-free museum days and spend time at neighborhood cafés, catching up with friends over coffee. 

What about health insurance?
If you and your family were covered under an insurance plan that is ending, you will want to switch to a new plan quickly.

If your current source of income doesn't offer you insurance coverage, you’ll have to find health insurance on your own. Do your research because you might qualify for a lower cost policy.

Remember your retirement
While it can be challenging as you transition to a single income, you still want to save for retirement. When you’re creating your budget, remember to include a space for pretax retirement contributions. 

Another way to have more: Make more

Shifting to a single income may be the catalyst you need to seek out that new job, next promotion, or ask for a raise.