How to Set Up a One-Income Family Budget

Budgeting with one income can be challenging.

Budgeting with one income can be challenging.

Nearly 80 percent of married couples rely on two incomes, according to the New York-based Families and Work Institute in 2010. So whether you're raising a one-income family by choice or because of circumstances beyond your control, such as layoffs or divorce, establishing your budget can be challenging. Making a budget may not seem fun or exciting, but it's a good way to make sure you have money for the things you need and some of the things you want.

Keep a spending log for a month, and be vigilant about writing down every dollar you spend. The only way to make an effective budget is to be aware of how much money you're spending, says Jean Chatzky, author of "Make Money, Not Excuses."

Make a list of all your set monthly expenses, including mortgage or rent payments, insurance payments, credit card payments, childcare costs, utilities, homeowners association fees, and car payments.

Add up the total amount of money you earn each month from work, freelance projects, child support, dividends payments and other sources.

Subtract the amount of money you have to pay out each month from the amount of money you earn each month to get your monthly discretionary money. This is the money you'll use to buy necessities, like groceries and gas, and the money you have available for entertainment and luxuries.

Compare the amount of discretionary money you have available each month to the amount of money you recorded in your spending log. If you're spending more money than your discretionary income allows, your spending log can help you find ways to trim your spending, like bringing lunch from home instead of grabbing fast food, or watching a movie at home instead of going to the theater.

Withdraw in cash the amount of money you have to spend on non-fixed expenses each month, and put it in labeled envelopes. You'll use some envelopes, like groceries and gas, every month, while other envelopes, like Florida vacation, may be only used once. Spending cash for your discretionary expenses during the month can help you stay on financial track.


  • If you're a two-income family making the switch to a single income, practice following a one-income budget for a few months before you dive in, recommends Ben Gilbert, a certified financial planner in Portland, Oregon. Funnel one salary directly into your savings account for a few months to test the one-income waters. You'll be able to discover challenges and address them before you really become a one-income family.

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