When life throws you a curveball, your finances could take a hit. Unexpected changes such as a sudden job loss or illness can mean that your household has to go from being a two income family to a single income family. This can put a strain on your family’s finances and cause plenty of stress, but these tips will help make the transition from a two income family to a single income family a little less stressful.
Have a savings safety net in place
Having money in your savings account can make you feel more secure at all times, not just if you lose one family member’s income. Unexpected emergencies could pop up at any time, so if you lose your job, a savings safety net could be a real lifesaver. Try to keep enough money to cover at least three months’ worth of living expenses in your savings account at all times.
Create a household budget
Even if you have two incomes, a budget is an important tool. If you create a budget that allows you to see exactly what your living expenses are, you can tighten up on wasteful spending and put more money into your savings account. If you are constantly short of money, a budget can help you prioritize your spending so you can make your money go further.
Clear your credit card debt
Credit card debt can hurt your finances if it’s not paid off in full every month. Don’t fall into the trap of using credit cards to replace lost income. You won’t have the money to pay the cards off in full each month and you’ll accrue excessive amounts of interest.
Living below your means will allow you to build up your savings so that if you do lose one or more sources of income you’ll still be able to live comfortably and pay your bills.