Living on a Single Income (3 Minute Debt Break)

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ith a wavering economy and unemployment continuing to be a concern, thousands of households have found themselves struggling to make it from one financial obligation to the next. This is especially true for single income families. If you are one of thousands of families performing the financial balancing act of trying to get by on a single income, it can be difficult to make financial goals beyond your next payment. 

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The good news is, with a lot of planning and a little bit of compromise, you can build towards a strong financial future. Here are some tips to consider: 

 Budget.

The first step in taking control of your finances is to create a detailed budget. A budget will give you a full understanding of how much income is coming in and where your money is going so you can adjust your spending to best meet your needs and goals. If you don’t have a budget, set up a system to track your spending. This will help you base your budget on realistic expenses rather than ‘guestimates.’ The most important thing about creating a budget, however, is sticking to it! 

Another important tip is to live within your means.

 Be honest with yourself about what you can afford. Don’t go into debt buying a brand new car, going on a shopping spree or racking up bills on a credit card if you have no means of paying the debt off in an orderly fashion. A credit card shouldn’t be used as a tool to help finance a life you can't afford. When you splurge on credit, it becomes very difficult to turn back. Credit cards aren't a substitute for saving and budgeting. 

Try to pay for everything with cash instead of credit.

If you don’t have the cash, you may have to compromise and go without until you can save the money you need or re-arrange your plans to accommodate your financial situation. In order to ‘live within your means’ it is especially important to understand the difference between needs and wants. 

One of the best ways to reduce debt is to also cut down on expenses.

Look over your expenses to see what you could do without. For some it may be cable, for others it may be gym memberships. Some of the luxuries of a two-income family probably won’t fit into a single-income budget. 

These tips may at first come across as limitations, depriving you of ‘fun.’ However, your spending plan will allow you to live within your means, avoid the stress of money troubles and in the end, give you the freedom to make smart choices with the money you have as you plan for the future. 

 

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