When you become a stay at home mom, you have so much to worry about. Your kids, getting food on the table, keeping the house clean, managing the finances—and budgeting doesn’t come easy when you live on one income. At least it didn’t for me, and this is why.
You can’t expect to set a budget and forget it at the start of every month. You’ll end up overspending and wonder where your money went every time.
That said, I’ve found a MUCH easier way to budget my husband’s income.
Instead of budgeting month-to-month, I start a new budget every time he gets paid.
So I’m actually budgeting-by-paycheck, and I swear by this because it’s the only budgeting method that’s helped me consistently make a family budget for the last five years with my husband’s VERY irregular income.
And this budgeting method may be the perfect solution for your one-income family too!
4 Steps to Budgeting When You Live On One Income
#1 Brain dump your bills.
For this budgeting method to work, you’re going to need a list of all of your monthly bills and their due dates (because the last thing you want to do is get behind on your bills when you’re already falling behind on everything else in your life).
Set a timer, grab a piece of paper, and an ink pen. For the next five minutes, write down everything that you pay each month. It doesn’t matter if they’re on autopay or you have to mail a check (gosh, I hope not!).
You don’t have to think about the order in which they are due right now. Just get all of your bills out of your head and on paper so that you can see them. At the end of your five minutes, double-check to make sure you didn’t forget anything.
Ready? Set. Go!
#2 Pull out your calendar.
Okay! So you’ve gotten all of your bills written down. Now it’s time to pull out a calendar.
You can use the calendar app on your phone, a dateless printable calendar, or a big paper calendar that you can get from literally anywhere. Because, going forward, this is what you’ll use to keep track of your bills—easy peasy, right?!
So this is how it works: On your calendar, write down or insert your bills on their due date. For example, on the 1st, you’d write down Rent/Mortgage and the amount you pay. Keep going until you’ve filled up the dates on your calendar with all of your bills and the amount you pay.
If the amount you pay for some of your bills fluctuates from month-to-month (like utilities), then you should overestimate the amount you’ll owe in your budget. For example, if your electric bill typically costs about $120/month, this is the amount you’d budget for this month. If it ever increases, then use that new number as the amount to budget for the next month.
NOTE: It’s always good to overestimate and be under budget than it is to underestimate, be over budget and unable to pay your bills.
#3 Budget your paychecks.
You’re doing great so far! The next step requires a little more brainpower, though, because you’re going to figure out how to split your bills with your paychecks.
First, refer back to your calendar and mark a star on your paydays for the month. Next, determine which bills are coming out of each paycheck. This step is important because if you’re living paycheck to paycheck, you don’t want to be broke for two weeks because you’ve prematurely paid all of your bills.
Paying your bills ahead is good, don’t get me wrong, but paying them closer to their due dates (and not a day later) is just fine too.
Some people CAN set a budget at the beginning of every month and pay all of their bills at once. But if you don’t have that kind of financial freedom, then this budgeting method will work better.
Here’s how to do this:
When your first paycheck deposits on or around the 1st of the month, any bills that are due between the 1st-14th need to come out of your first paycheck.
When your second paycheck deposits on or around the 15th of the month, any bills that are due between the 15th-31st need to come out of your second paycheck.
In most cases, this approach works just fine. But if you have irregular income, then you may have to maneuver some things around to make sure you won’t overdraft your account. That means you may have to pay bills that are due later in the month early, or pay bills that are due earlier in the month ahead with your second paycheck. So pull out your calculator and get to work!
NOTE: Don’t forget to add in necessities like groceries, gas for your commute, and household items (toiletries, paper products, detergent, etc.).
In the next step, I’ll show you what to do with any extra income you have leftover from each pay period.
#4 Create savings funds.
Let’s be real here, the one thing about living on one income is that you don’t really have extra money to spend on the things you’re used to splurging on. Random things like Starbucks coffee runs, mini Target shopping sprees, and date nights with your hubby can add up fast and land your budget in hot water.
Because chances are, you’re probably living paycheck to paycheck and you can’t afford to spend impulsively or you can’t afford any surprise expenses either. You have just enough income to get by while you’re at home taking care of your kids—I get it.
That’s why you HAVE to create savings funds in your budget, otherwise, you’d NEVER have money for any of these things—which isn’t fun.
So any money you have remaining from your paychecks after your bills are paid need to go into savings funds. The good thing is, you can create funds for as MANY things as you want!
- Kids need clothes? Check.
- Want to take a family vacation? Check.
- Emergency savings…
- Surprise medical bills…
- Dining out…
- Car repairs & maintenance…
- Fun money (date nights, entertainment, etc!)…
- …you get the point!
What I LOVE about having these funds in place is that I’m tricking myself into staying on budget and I’m actually saving money! And because I’m a huge fan of zero-based budgeting (subtract your income from expenses to equal zero), I know that the money I’m putting away now is going towards something that I’ll want or need later.
So go ahead. Decide what to do with that extra money you have leftover. Don’t leave more than $10 in your checking account and think that you’re “saving” it because you’re not—you’re only setting yourself up to impulsive spending.
(Been there, done that, and couldn’t help but to buy the t-shirt.)
But if you don’t have any extra money remaining after your bills are paid, you can do two things: 1) reduce your spending, or 2) make more money.
Some easy things you can reduce from your budget include:
- Your tv bill: You can cut your cable, stop paying too much for tv, and use Sling TV instead — it’s only $25/month for 50 top channels and you can try it out for 7 days free here.
- Your cell phone bill: You can switch to a low-cost cell phone carrier — we switched from Sprint to Metro by TMobile (formally MetroPCS) and saved almost $500/year for the same service! Now we only pay $90/month for two unlimited phone lines which also includes an Amazon Prime Membership for free! (YAY!)
- Your food expenses: You can bring your lunch to work instead of buying it every day.
- Your grocery bill: If you don’t have time for clipping coupons, you can get free refunds on your groceries with Ibotta.
If you just need to make a little extra money, you can use Ibotta for your groceries or Rakuten for your online purchases, declutter and sell your stuff when you need to, participate in paid surveys, or turn your hobby into extra income on the side!
You did it!
Congratulations! Now you know how to set up a budget even if you live on one income—it doesn’t have to be hard at all!
As long as you’re creating funds in your budget and keep your spending under control, then you can live well on one income without being broke.
But, I have to warn you: if your house is trashed and always a mess, it can definitely impact your budget.
So if you’re struggling to keep up with the chaos of your home as well as EVERYTHING ELSE that you have going on in life, then you need to join the Reclaim Your Sanity Challenge: 8 Simple Steps to Conquer Overwhelm and House Management (even if your husband doesn’t help), so that you can start living a life that supports your effort to save money. Grab it while it’s still FREE here!