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Financial Planning

How to Make Single Income Living Work

2015-02-24

For a variety of reasons, it's common for one parent to stay at home for at least a few years after having children. Alternatively, some may care for an aging family member. The problem is, even though caretaking is a full-time job, it certainly doesn't pay like one. With skyrocketing daycare costs, gas prices, food, housing, and beyond, it seems like nothing is getting cheaper these days, and you're not alone in noticing that. 

Prioritize

The cost of everything is rising, and it's not unheard of for one of you to be in charge of saving money, while the other makes it! This is where prioritization comes into play. It takes a significant amount of discipline when discerning between something your family wants, versus what it needs. Plenty of enriching activities exist for your family without having to invest in the newest video game console or season passes to expensive theme parks. This advice even translates to dietary habits. Opt for homemade meals that won't cost a fortune and save in both food expenses, as well as future healthcare costs. What matters most as a family isn’t necessarily what you do, but that you do it together.

Plan Ahead

Every confident step forward is backed by a solid plan that goes beyond month-to-month paychecks and expenses. Be careful not to acquire new debt unless you have a clear idea of how long it will take to pay off. Be sure to account for interest as well. People are often lulled into complacency over enticing introductory terms without actually reading the fine print.

Planning means you and your spouse save and invest money each pay period. If you have children, start a college fund for them as early as possible. Children in military households often qualify for some type of G.I. Bill. Remember, forecasting your financial future works best with additional perspectives. Our AWM&T Relationship Managers excel at planning for whatever life may throw at you, so you’re always prepared!

Have an organized budget

Within your big-picture retirement plan, outline a monthly and weekly budget that contains the specifics. It’s an excellent opportunity to see how much you spend on bills, groceries, and other necessities in your life. It’s also a chance to save time and money. For instance, if you have an idea of what your family will be eating for the week, you can better plan out your grocery trips. You’ll also be in a better position to use coupons. Couponing is popular for a reason: it works!

Take an inventory several times each year to see if there are items within your budget you can cut. Don’t want to pay four-figures for the next-generation phone upgrade? Talk to your provider about keeping an existing phone longer. Using a streaming service more than your cable provider? Consider getting rid of cable all together.

The main lesson when living on a single income is to be aware of where your money is going. There's nothing wrong with micromanaging your finances, but communicating as a family throughout the decision process will help keep everyone happy. You deserve financial solutions designed exclusively for military families like yours and Relationship Managers at AAFMAA Wealth Management & Trust exclusively focus on that service. Contact us today, and we'll do more with what you have planned together.