Learning to live ON ONE INCOME
How to thrive and not just survive!
Living on a single income is less than ideal for us highly geared Aussies, but it’s a reality for many families. Those with a stay-athome parent, older couples where one partner has retired, or single parents with children are just some of the reasons you may be coping on less.
But it’s not all doom and gloom – there are things you can do now to keep your finances and your future on track. AMP financial adviser Dianne Charman, who has devoted decades to helping people make better money choices, shares her top five tips for making the most of living on one income.
1 TRACK YOUR EXPENSES
While budgeting is always important, whether you’re living on a single income or not, monitoring cash inflows and outflows is essential.
It’s a great way to identify where you’re spending too much and figure out where you can cut back. There are several budgeting apps available now, as well as options like breaking out the old notebook or using a computer program like Excel.
2 PRIORITISE SAVING
As part of creating a budget, it’s also essential to think about saving. While not everyone will be able to manage monthly expenses and still have a lot of money left over, if you are able to develop some savings, try not to be tempted to spend it.
A good way of building a nest egg is through your monthly budget – by trying to allocate a certain amount per month (automatically) to a separate special purpose savings account.
3 WHAT BENEFITS CAN YOU GET?
It can be difficult to manage day-to-day expenditure on a single income and Australians should check to see what government benefits they’re entitled to. For example, the Single Income Family Supplement is available to eligible families.
4 LIVE WITHIN YOUR MEANS
Try not to spend beyond your means. It’s important to balance your needs and wants – try not to spend on things
that aren’t necessary. If there’s a new smartphone coming out, think about whether your current device is adequate.
5 THINK IN THE LONG TERM
While not everything can be planned for, keep your eye on what’s coming up next. We know saving is important to build a nest egg to take care of certain costs or cutting back in months where there are extra costs to manage. This includes key expenses that can be planned for, such as school excursions, orthodontic care like braces, and holidays.