Choosing to Live Life on a Single Income
Ever since my wife and I have been together, we have only lived on a single income. We didn’t actually choose to go this route, it has always just been the default; either I would be in school and Laura would work to pay the bills & save money, or she would be in school and I’d be working. Basically, we did this until Ayla was born, and now Laura is a stay-at-home momma. So here we are, still living on a single income.
We’ve never actually had the chance to consider ourselves a “D.I.N.K.” couple — “Double Income No Kids”.
In reality, this has actually worked very much to our advantage.
While at times it would have been nice to have two income sources, learning to live on a single income for our entire relationship has taught us to be very smart with our finances. However, living on a single income doesn’t mean we’re poor and can’t do anything other than live on a shoestring budget. In fact, the opposite is true! We travel every year, sometimes multiple times, we dine out on a regular basis, we recently purchased a new (to us) vehicle, and we manage to put money into savings & investments each month. However, we don’t have a mortgage, we share our meals when we eat out, we meal plan, we look for deals, and we budget.
We’re used to living this way. Should Laura take on a photography project, or book a wedding, it’s just extra money in the bank. The same goes for when I have a particularly outstanding month in business. We’re not reliant on a second income to sustain our lifestyle, or to pay our bills. This also means that when we had our baby, we didn’t have to sacrifice a second income — we didn’t have it in the first place! 🙂
If you build a lifestyle that requires a double income in order to sustain itself, what happens when one of those income sources are cut off? This can happen for a number of reasons:
- Being laid off
- Quitting your job
- Going to school
- Becoming ill
- Getting pregnant
- Being a stay-at-home parent
It’s not a crazy thought that you might end up going to school at some point, or that you might be laid off from your job. What if you have a baby?
The (awesome) benefits of living on a single income
There are some great benefits to living on a single income, some of which I’ve already mentioned:
- You’re more aware of your finances
- Your lifestyle will cost less
- Any additional income is a bonus
If you’re a double income family, or if you’re a D.I.N.K. couple, the benefits can be even greater when choosing to live on a single income:
- One income source can go directly into savings / investments
- You’ll still be able to pay your bills if one income source is cut off (job loss, becoming ill, having a baby, etc.)
- If you don’t have a mortgage and are looking to buy a house, one income source can go directly to paying the mortgage, and the savings you’ve amassed with one income can serve as a healthy down payment.
Of course, this won’t happen overnight, and you’re going to have to sacrifice a number of things in order to minimize your expenses.
Some questions to consider:
- Can you manage having a single vehicle?
- Is there superfluous spending you can cut? (i.e. Gym membership, magazine subscriptions, massage appointments, hair cuts, etc.)
- Can you share meals when dining out? (I already know this answer: Yes you can. Not only is it easier on your wallet, but it’s usually the healthier option.)
- If you’re renting: move into a smaller place, or try negotiating with your landlord for lower rent (I did this and saved us $150 per month.)
- How can you minimize your monthly utilities? (Put on a sweater in the winter instead of bumping up the heat a couple degrees.)
A look at the numbers
When it comes to finances, I love looking at the numbers, because it gives you a good idea of what’s coming in and what’s going out. The numbers don’t lie!
Let’s say you’re a D.I.N.K couple living in Alberta, Canada.
Income (the following example is before taxes, but this is still entirely manageable on a smaller income)
In 2011, the median family income in Alberta was $89,830.
So, let’s say one person makes $40,000 / year.
And the other person makes $49,830 / year.
We’ll put away the former income, and use the latter to take care of our bills & expenses.
That leaves us with $4152.50 / month.
The average monthly rent in Calgary, Alberta for a 2 bedroom apartment is $1576 (crazy, I know).
That leaves you with $2576.50 for the rest of your expenses.
Let’s say your grocery bill for 2 people is $500 / month (can easily be less).
That leaves you with $2076.50.
Let’s say you’ve sold one vehicle and are using only one for transportation. I’d say $180 / month for gas is reasonable.
Left over: $1896.50
There are a whole bunch of other things that can come into play here: cell phone, insurance, education, shopping, vehicle maintenance, dining out, entertainment — most of which is variable and can be minimized, or cut out completely. In this scenario, we have roughly $1900 left over to pay for these expenses.
A total budget of $4152.50 / month is entirely manageable. Of course, if you needed to dip into the other income for certain (necessary) expenses, that’s obviously OK.
Now let’s say you’ve managed to live on your $4152.50 budget, and put away the other income of $3333.33 / month.
That’s $40,000 of savings in one year!
In two years, you’ll have saved nearly $80,000 and can put that towards a down payment, or investments, etc.
There are many things you can do to greatly minimize your expenses. Here are a few resources worth checking out, if you’re serious about it:
- 33 Ways to Reduce Personal Debt
- 73 Great Debt Elimination Tips
- The Completely Achievable Path to Becoming a One-Income Family
Living on a single income has worked very well for Laura and I, and I bet it can work well for you and your family. Why not try to minimize your expenses and live entirely on a single income? I think you’ll be quite happy with the results (and the savings)!
I’d love to hear from you
Are you a D.I.N.K. couple? Do you have kids? Have you tried living on a single income? I’d love to know your thoughts and experiences. Feel free to share in the comment section below!
Thanks for reading,