Since the beginning of the pandemic, many families have been hit hard by the economic impact of the virus. Since March, unemployment rates have spiked to 14.7%, and have only just begun to lower. Many families have been unexpectedly confronted with a family member losing a job, forcing them to become one-income households.
If you are living on one income as a result of the coronavirus pandemic, or have always been a one-income household, here are some challenges you may be facing and some tips on how you can better manage your finances during these difficult times.
- Challenges facing single and low-income households
- Being unable to pay for essentials: if your family is surviving off one income, you may find it incredibly difficult to make ends meet, especially if you have a large family. With the cost of housing and groceries rising, one income cannot always afford to pay everything per month.
- Constantly worrying about money: if you have very little financial security, the constant worry of not being able to properly look after your family can be drained. This stress can seriously affect your physical health, and can cause cardio-vascular issues such as heart attacks. It can also have a negative impact on your mental health, and the constant stress and worry can lead to issues like depression and anxiety.
- Debt issues: if you and your family have been struggling with money for a long time, chances are you’ve thought about applying for a loan to help pay your bills. While it may seem like a good idea at the time, loans usually come with a steep interest rate, which could plunge you even further into debt.
Tips for families living on one income
If you are struggling with any of these issues, here are some tips to help your one-income family.
- Start budgeting: the first step for any family wanting to regain control over their finances is to set a budget. Working out how much money you have coming in can help you understand how much you can afford to spend each month without running into financial difficulty.
- Live within your means: be honest with yourself. If you are struggling, you can’t afford to treat yourself to luxury items. Don’t go on any shopping sprees you can’t afford, and don’t rack up your credit card debt.
- Check your utility bills: Besides rent and food, utilities are one of the biggest monthly expenses for families. Conserving energy and implementing energy efficient practices can help significantly lower your stream energy bill. Some tips include; making sure your home is insulated, updating windows, investing in smart energy efficient appliances, turning off lights when leaving a room, utilizing ceiling fans, etc.
- Cut down on any unnecessary expenses: be harsh with yourself. If you have a gym membership you never use, you need to stop your subscription. If you have multiple subscriptions to streaming services, it may be time to cut down on the amount of services you are paying for, as chances are you aren’t making the most out of them.
- Earn extra income: if you have the time, or you have a family with a stay-at-home parent, you may want to consider trying to earn some extra income during your free time. You could freelance, dog-walk and even babysit for others until you are back on your feet with your finances.
- Shop around: don’t just purchase the first item you see. Before you even consider making a larger purchase, make sure you first check online to see if you can buy it cheaper. If you have the time, take some time finding the best deals in different supermarkets.
It can often be difficult for a family to survive on one income. Hopefully, these tips will help you better manage your finances, especially during these difficult times.