Raising Kids on a Single Income

Whether planned or unexpected, raising kids on one income can put a strain on your finances. It may seem impossible, but changes to your lifestyle along with careful financial planning helps you live within your means with only one paycheck. Making the changes as soon as possible helps you avoid major financial stress that can affect family life.

Plan Before the Transition

If you haven't yet transitioned to one income, now is the time to start preparing for the decreased income. Start living on one income immediately so you get used to the pay cut. This also gives you the chance to put aside the second income as long as it is still coming into the home. The transition gives you time to handle issues such as switching health insurance if needed or refinancing your home for a lower payment before you become a one-income family.


Creating a budget is a simple process of allocating the money that comes in each month to your expenses. You should include any money you spend in the budget, including variable expenses, such as groceries, clothes and entertainment. The challenging part of budgeting for many families is to actually stick to the financial plan. Since you only have one income, you need to stick to the budget even when you want to spend more. Let your kids know you won't have extra money to spend when they ask for toys or other extras at the store. You don't need to go into all the details, but kids can learn about saving and spending wisely as the family cuts back on extra spending.

Make Necessary Changes

Making major changes isn't always easy, but you may have to give up some of the luxuries in your life to make one income work. Housing is often a large portion of the monthly expenses. If your mortgage payment or rent eats up too much of one income, consider moving to a more affordable place. Selling a vehicle that currently has a high payment is another way to make a single income possible. If only one parent is working, you may be able to get by on one vehicle. Moving closer to work or switching to public transportation can also make selling a vehicle feasible.

Plan for the Future

With less money coming into the house, it's easy to only focus on the present, but planning for the future is essential to your family's security 1. A life insurance policy on the person earning the income provides financial security should that parent pass away. Retirement funds for both parents secures your future later in life.

Find Alternate Income

Traditional jobs aren't the only way to bring money into the household. Odd jobs here and there give your family a financial cushion. If one parent is home with the kids while the other parent works, occasional babysitting is an option. You may find a seasonal part-time job in the evenings when your spouse is home or while the kids are in school. Selling or consigning old clothes and household items is another way to bring in money.