Yikes… now we have to live on one income

The average Canadian family has both spouses working outside the home. We live in a culture that encourages a high standard of living, often unachievable by a single salary. But whether your significant other experiences a job loss, sickness, or just wants to put more focus on family, careful planning can make the transition to a single-income home much smoother.

Ideally, you would like 6-12 months to properly prepare for living on a single income. In cases where this is planning isn’t possible, communication between all family members will be key to making the adjustment.

Next you will want to work out a plan together to pay the bills and upcoming expenses, like vacations, retirement, and education savings. You also need to prioritize debt repayment, since those commitments will only get more cumbersome in the future.

Lifestyle is the biggest adjustment that is usually required for the transition. There are small changes, like cable, magazine subscriptions and phone packages, as well as big ones like keeping only a single vehicle or moving to a more affordable home. It might seem scary, but remember you don’t have to have to change who you are, just some things that you do.

Ultimately, even if you aren’t planning on living on a single income, you should prepare for that possible outcome. So start a savings account now and keep yourself one step ahead.