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5 Steps to Going from Two Incomes to One

Going from two incomes to oneTo some, it may seem impossible to go from living off of two incomes to living off of one, but millions of Americans are living this way of life every single day. There are many reasons why families live off of one income – from someone losing a job to medical reasons to wanting to stay home with young children. Whatever your reason, it can be very advantageous to live off of one income instead of two, including having a better handle on your finances, eliminating items you don’t need (such as cable) and having more freedom in your family unit.

If you’re currently living off of two incomes but hoping to go down to one, here are five crucial steps you’ll need to take.

Step 1: Evaluate your budget in detail

Write down every single fixed and variable expense and take a hard look at what you can reduce or eliminate. After eliminating items such as cable, expensive cell phone plans and weekly trips to the coffee shop, see where you’re at. The harsh reality is that you may need to downsize your home in order to make the dream of living off of one income a reality. By downsizing, you’ll save in your rent or mortgage and your utility bills. This can be a savings as large as $1,000 per month or more. Get rid of the idea that you can live the same lifestyle off of one income. If you really want to live off of one income, you’ll have to be willing to cut expenses – both small and large.

Related: 15 Simple steps to creating a personal budget

Step 2: Pay off all debt

If you have loads of debt, it’s going to be much more difficult to live off of one income, if not impossible. Develop a plan to pay these off as quickly as possible. That may mean working overtime, taking on a side job, selling items you no longer need, downsizing your vehicle and more. Depending on your financial situation, you may be able to have some debt and still live off of one income, but strive to have as little as possible before making the switch.

Step 3: Have an emergency fund in place

The more money you can have in your emergency fund, the better. At the very least, though, have three months of living expenses saved before making the transition from two incomes to one. Living off of one income means your budget is going to be tighter all around. If an emergency were to happen or if expenses were higher for the month than planned, you’ll need to be able to pay for it without having to get back into debt.

Step 4: Consider a side hustle

Can the person who is planning on staying home do any sort of work from home in order to supplement some of the income loss? Side hustles can be a great way to make money and some people are even able to bring in a full time income from their home. You can freelance write, create a product and sell it, refurbish furniture or antique items, work in the customer service field (from home), take online surveys, be a virtual assistant and more. Any money made from the side hustle can be saved, invested or used to cover additional monthly expenses.

Step 5: Do a trial run

Finally, before taking the plunge and quitting your job to live off of one income, test it out to see if your budget and plan are going to work. Pretend like that second income does not exist and put it in your emergency fund automatically. If you can live like this for a few months, you’re ready to make the transition from being a two income family to a one income family.

No longer will you be able to keep up with the Joneses, and that’s OK. To live off of one income, huge sacrifices are going to need to be made. Ask any family who lives off one income and more than likely they will say that the benefits far outweigh any material possession. By being content with less, your dreams of being a one income family are more than doable.


Author Bio: Donny Gamble Jr. is founder of Personalincome.org, a published author, and investor. He graduated from The Ohio State University and has a passion for teaching others about alternative investment and retirement strategies. He is a contributor for Huffington Post & AllBusiness.com, along with other personal finance websites.


Image via StockMonkeys.com

About Grayson Bell

Grayson is the founder of the personal finance blog, Debt Roundup. He also runs a blog management service to help out bloggers and site owners focus on creating content, not fixing issues.


  1. Nice article Donny! We recently went from two incomes to one and having an emergency fund and being 100% out of debt were critical for us. Makes the transition much easier. O-H…I-O 🙂

  2. These are all great tips! Having an emergency fund is a need. Too many people go without one.

    • Michelle is spot on about an emergency fund being a NEED. It’s the only thing that is going to prevent you from panicking if that “one income” starts looking shaky. That being said, I think basing that emergency fund on 3 months of expenses is a little skimpy. I opted for an Emergency Reserve with a year’s worth of expenses in a savings account, plus a Medical Expenses Reserve equal to the one-year out-of-pocket limit on my insurance policy. Still, I realize that you can only do what you can do. Just try to stretch it a little more. :O

  3. I love the trial run suggestion, for it would take the anxiety out of the equation. Also if you need to do some minor adjustment you will know what they are and apply them. Having a trial run will also boost your confidence that you can make it happen. Great tips.

  4. I have a client couple who is thinking about doing this and I told them to go for the trial run while they were both still employed that way that saved all of one salary over the period to bulk up their savings but also learned if they could make it work within their budget.

  5. A trial run is always a good idea. Plus you can use that extra money for savings while you “attempt” to live off that one income.

  6. Great post =) We are about to have some significant income changes in our household. The key for us was preparing for it ahead of time and being realistic about what the changes would mean. It helps to have really low expenses too. Having low expenses means having more options, really.

  7. Great tips. I think the emergency fund and trial run are absolutely critical. You don’t want to panic every time something breaks down, etc. And sometimes it takes people a few tries before they can also recondition themselves to an one-income home. As you said, often times some sacrifices need to be made and it may sound easy on paper but reality can be more difficult.

  8. We’re a single income family and the advice to live off one income, even when you make two is a good one. That extra money can be used to fasttrack debt repayments, bulk up your emergency fund and to help reach whatever goals you have. It’s a big change for your finances and for your mindset, but living off one income CAN be done.

  9. I think a trial run is definitely a necessity. That way, you can find out (without repercussions) whether it’s feasible in the long-term.

    My husband is on disability, so we already sorta live on one income. I can’t say as I would give up a second income if he got a real paycheck. But I know for some people it’s important to be home with the kids or even just not work at a job they hate.

  10. I’m not opposed to living off of one income…except neither my wife nor I can see ourselves staying home full-time. We both have career goals and both plan on working even when we have kids.

  11. Gray, this is really a good tactic. I am planning to run a trial this month to see whether this fits my needs and type. Thanks for the tips Gray.

  12. I’ve planned my whole life on one income. Hopefully, if I ever get married. We can bank the entirety of one of our incomes. (Until we have kids)

  13. Great tips here for the one income transition! We have never had two incomes so it was quite easy for us. I can see where having a trial run is super important.

  14. I think it is completely do-able to live off one income. Some people may not like the harsh reality that comes with taking an honest look at their expenses, specifically what may need to go to support the single-income lifestyle. Despite having two minis, our current choice is to keep with the double income mode for now so that we can enjoy double retirement in the nearer future!

  15. Doing a trial run is huge. My wife and I did this recently to see if we could afford to have one of us stay home when we have kids. There is no way we would have just jumped into the fire without trying it out first.

  16. My husband and I have lived just off of just my income since we got married. Maybe when the day comes for us to go from one income to two, I’ll the the one writing the thoughtful post! Haha. That’s still a year away but I’m already tempted to start thinking about how to use the extra money, when really, there’s nothing to think about! Dept repayment. That’s it! 🙂

  17. Isn’t it better to have one income working together as a unit instead of 2 separate independent objects. I would suggest looking for ways to be independent on each other, to grow that one income even bigger, e.g. making smarter investments. But, as always its best to be flexible and experiment to find out what works best for you.

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