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Can my two income family live on one income?

Can my two income family live on one income?
Image source: Getty Images.

Can your family afford to live on one income? According to the Office for National Statistics (ONS), dual-earner households are the norm in the UK, with both parents working full time in 68% of families.

Still, becoming a one-income family sometimes just makes sense.

For some families, it makes more financial sense if one parent stays home and takes care of the kids rather than paying for childcare. Other families choose to switch to a single income to take a career break or deal with a family situation (such as caring for an ill relative).

No matter why you’re considering it, here are some tips to help you figure out if it’s right for you.

How much does the average family need to live comfortably?

The Joseph Rowntree Foundation publishes regular reports regarding the amount of money people need to reach a minimum socially acceptable living standard.

In 2020, the average family of four (a couple with two children) needed to earn a combined £37,400 (£18,700 from each adult) to sustain a household. In big cities like London, the amount will be higher, especially as children get older and their expenses increase.

Do you want to know if your earnings are enough for your family to live on one income? To find out, the MIS (Minimum Income Standard) website asks you three basic, short questions. It then calculates the minimum income for your exact family type.

Benefits of living on one income

While the amount of money you earn will go down once one of you quits your job, there are other benefits that will make up for it.

You’ll have more time for your family. While there’s nothing wrong with daycare facilities, some parents just want the experience of staying home and spending more quality time with their children.

It’s a good opportunity to be around for milestone developments, but it can also save you money. If you work opposite shifts to your partner, this is also an option to have more time together.

You’ll have more free time to pursue passions and hobbies or to go back to school to pursue a new career.

Misconceptions and barriers to making the switch

There are a number of perceived barriers to living on one income. Let’s take a look at a few:

  • You will have to give up having fun. This is not true – but you will have to find ways to spend less on entertainment or find ways to have fun for free.
  • It will be harder to pay off debt. This will depend on your circumstances. If you earn close to minimum wage and cut one salary, you probably won’t have a lot of extra money to send to debt. It might be better to pay off high-interest debt while you’re still a two-income household.
  • You won’t be able to save as much. Unfortunately, this one is true. There’s just no way to save as much for retirement or a big financial goal if you’re earning a lot less as a family. It’s the payoff for one of you having the freedom to stop working.

How to make it possible

  • Set up an emergency fund before you try to live on one income. This can help cover unforeseen expenses so you don’t go into debt.
  • Figure out ways to live on less. This includes cutting down on unnecessary expenses, cancelling unused memberships, eating out less and stopping impulse shopping.
  • Budget for everything. A well-thought-out budget will include all of your regular expenses (mortgage, groceries, transportation, etc.) plus extras such as yearly insurance payments. Once you create a budget, go over it and trim it down. The less money you need to live, the easier it will be to live on one income.
  • Apply for any benefits you might be entitled to, such as universal credit, tax credits, child benefits and more. Visit the website to see what benefits are available to you.

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