There are many reasons why a family might transition from two incomes to one. From workforce reductions to family plans, making this change can be more difficult than one might assume. Fortunately, there are steps to take that can make the process feel more manageable.
Understand Your Situation
Start your management process by assessing your situation. How much do you have in savings? Is this going to be a long-term reduction, or is the impacted party likely to find another job soon? These are the questions that are going to define your financial life as you move forward, so ask them early so that you can get a reasonable picture of what your future will bring.
Assess Your Budget
Your next step is to assess your budget. You will be bringing in less money overall, of course, but also make sure to account for the fact that certain work-related expenditures won’t happen. Your goal here should be to see what you can eliminate from your budget without interfering with the necessities. You may find that you can still pay your bills with ease by eliminating certain other less-necessary expenses from your life. Regardless of how easy or difficult expenses are to cut, a budget will allow you to understand better where your money is going.
Avoid Panic Moves
Finally, take some time to breathe. Do not make major life changes out of panic. While losing a job can impact your life, stop before you start emptying out your retirement accounts or taking out payday loans to pay your bills. It is easy to get into a cycle of overwhelming debt when you look at short-term solutions, so pause for a few moments to adjust your budget and see if there are less drastic ways that you can make up for your shortfalls.
Making the transition to a one-income household is difficult, but there are changes that you can make to ensure that it is less financially devastating for your family. Whether you are making this choice based on household needs or are forced into the situation by forces outside of your control, you can take ownership of your financial future by carefully assessing your ongoing needs.