9 Financial Pitfalls to Avoid for Families Shifting to a Single Income

9 Financial Pitfalls to Avoid for Families Shifting to a Single Income

Dropping an entire salary isn’t easy, especially if you make mistakes like these.


By: Lorraine Allen

Many families shift from two incomes to one. Sometimes it’s a choice, and sometimes it’s due to moves, illness, or job loss. In either case, this drastic reduction in income can be hard. It means sacrifice, on many levels from both parents, and added stress. But here to help steer you in the right direction, nine families candidly share the mistakes they made when becoming a single-income family, so you can avoid them:

1. “Do NOT dip into your retirement funds, no matter what. We had to pay an insane premium, which took half our savings, and now we have nothing to back us up.”

2. “We never made a realistic budget to live within our reduced income. We were careful and bought less, and we took no vacations. But we were overspending every month anyway, and went into major credit card debt fast.”

3. “We had no savings, so when my husband lost his job, and we lost our health insurance, we were in real dire straits. I had to pick up a second job, and he had to wait tables nights and weekends. Every family needs savings in case of crisis or unemployment.”

4. “I decided to stay home when our twins were born, to save on child care and spend time with them. But we did not pay off our credit card debts before I quit my job, and it became impossible to make our monthly payments. And then we were charged late fees and extra-high interest rates, which added even more to our debt.”

5. “We wanted kids, so we bought a big house, with a big mortgage. That was fine until I gave birth and quit my job, and we struggled and sacrificed a lot just to pay it. We did not need a house that big.”

More from P&G everyday: 17 Moms Share Their Best Financial Advice

6. “We never discussed how the money would be split when we switched to one income. I ended up feeling really guilty about spending anything on myself, since I was not earning anymore, and was really resentful when he would buy himself nice new clothes or tickets to sports games with friends. Our marriage suffered a lot from this lack of communication. We almost got separated.”

7. “I got a new car when I decided to quit my job and be a ‘soccer mom.’ But the extra car payment was the last thing we needed on one income.”

Registration

Become a member of P&G everyday and get exclusive offers!

Become a member

8. “We ignored many of the changes we needed to make; we figured we would save so much on child care and food, since I would be home cooking when I left my job, but soon we realized we had to cut back on all our spending to survive this change.”

9. “We stopped saving when we switched to one income, and now that our kids are almost ready for college, we hardly have a dime to help them out. It was hard just to pay the bills on one salary, but we should have made saving all the time a top priority anyway.”

Did you make any financial mistakes, which others can avoid, when shifting to one income?


Lorraine Allen is a writer, and mom and personal chef to one spunky 6-year-old girl with severe food allergies. You can enjoy their delicious recipes and follow their amusing family cooking adventures at Feeding Lina.

Image ©iStock.com/marcstock


More articles you may like:

5 Essential Legal Documents Every Parent Needs

11 Moms Confess: What Being a Stay-at-Home Parent Is Really Like

6 Tips for Talking Money With Your Spouse

Complete your personal information

Please fill in the information marked with an asterisk to proceed; if you want to get tailored offers and content, don't forget to fill in the optional fields.