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For most mums, the idea of trying to afford maternity leave can be petrifying. The last months of pregnancy are often anxiety-filled as you attempt to make plans and lay the financial groundwork you need to spend that all-important quality time with your little one.
No matter how much prep you put into making maternity leave financially viable, though, the reality is that UK maternity law ends at 52 weeks, full stop. After that, most parents face a cost they didn’t think to prep for – child care.
Increasingly, families with two working parents are paying above and beyond just to afford childcare that covers their working hours. It’s a pretty backward financial arrangement, and it’s one that may have you wondering whether becoming a single income family for a few years might serve you better.
The words ‘single income’ can send fear through any savvy saver’s heart, and with good reason. This is not an arrangement for the poorly budgeted family, and it could end in disaster if approached in the wrong ways. But, a single income lifestyle might not be the disaster you’re expecting, especially if a large portion of your wages are going towards childcare right now.
Whether mum or dad stays home, we’ve got some tips to make sure your finances remain afloat, even on that single lifeboat.
# 1 – Make sure you’re on the same page
Becoming financially dependent on your partner is tough. Before single income living is even a realistic concept to you, you should therefore be clear with your partner about what it would mean to you as a couple. Would you share a joint account? Would your partner be comfortable with you spending what you need?
One thing’s sure; your single income will fall apart before it’s even begun if your partner isn’t comfortable with your spending intentions. If they put restrictions on what you’re allowed to do or get funny about that money, your relationship will fall apart as well as your budget. Make sure, then, that your partner is 100% happy for you to spend that money as though it were your own. Within reason, of course…
Make sure, too, that your partner is happy with this arrangement. Shouldering the entire weight of a family’s finances is no easy feat, and the pressure may be too much to bear. You should never force this decision on them, but should instead arrive at this as the best financial move as a family.
# 2 – Know your outgoings inside out
Knowing your outgoings is always vital for getting on top, but never is that more the case than with the single-income lifestyle. When it comes down to it, your ability to subsist off one income means knowing exactly where your money goes, and how much you need each month down to the last pound.
Okay, you might not need to be quite that stringent, but you do need to be precise. The last thing you want is to reduce household income only to find that it isn’t financially viable. Instead, take the time to work out how much you realistically need. Take the time to calculate bills, mortgages, and other such non-negotiable commitments. Then, consider less tangible things like food expenses and other crucial extras.
It’s also worth considering things you could viably cut from your monthly outgoings. When you’re living on a single income, extras like television subscriptions and a monthly trip to the spa simply don’t take priority. Ease the pressure by cutting these costs wherever you can, then keep this final budget to hand at all times to remind yourself that a single income might not be such an impossible goal.
# 3 – Clear debts
It’s wise to clear debts whenever you’re on the brink of financial change, but that’s especially the case when it comes to reducing household income. Most incomes can stretch to cover the household, but they can’t always cover household costs and debt payments at the same time. What’s worse, attempting to manage both could see that debt quickly getting out of control, or underlying resentments coming to the fore as your partner has to pay your debt.
Instead, always aim to clear debts before committing to one income. You may find that embarking on something like a consolidation loan can help here as it keeps all debt payments in one easy place. Equally, a debt repayment plan could well see you clearing outstanding amounts within six months if you both continue working.
Delaying things in this way isn’t ideal, especially if your baby is already here and waiting for your full-time care. Still, having this ultimate goal in mind makes it more likely that you’ll be able to sustain the single-income lifestyle for a long time to come.
# 4 – Know what you’re entitled to
Note, too, that reducing yourselves to a single income household doesn’t necessarily mean your money will all come from one place. Parents are also entitled to child benefit, which adds up to £20.30 a week for your first child, and £13.40 for every subsequent child as long as your partner earns less than £50k.
This may seem like a small amount, but applying for these extras could well see a tight single income situation turning into something a lot more manageable. Bear in mind that even £20.30 a week adds up to £974.40 a year. As you’ll know from the budgeting you should already have taken care of, that money could make a massive difference to how viable your single income efforts will be.
# 5 – Find new ways to contribute
Speaking of topping up the pot, this is also the ideal time for you to find new ways to contribute to your household. In this modern age, even giving up work to look after your littles needn’t mean giving up any form of income forever. In fact, mums across the world are now finding new and unique ways to make money, all without having to worry about leaving the house.
Childminding and other such care-based roles have long been a popular choice here as they fit within every mum’s daily routine anyway. More recently, options like survey sites and even mummy-based blogging have also risen to popularity for many. Each of these can provide at least a modest income for relatively little output. This can be useful for boosting the household profit pot or even just affording you a little spending money if you aren’t comfortable surviving on the back of your partner’s efforts. It really is like getting the best of both worlds.
# 6 – SAVE!
Finally, the point you knew was coming at some stage; single-income families should always have savings behind them. The fact is that, no matter how well you plan, budget, or supplement that single income, things are going to get tighter around here. Your pennies are set to become more precious, and your budget will become a delicate balancing act of respect and working out.
Sadly, this single income mentality doesn’t leave room for the setbacks that often hit when you have a family and a home to take care of. You may have enough for your mortgage payments, but what about when the boiler breaks? Insurance can, of course, prove a lifesaver in these situations, but you’ll also want to make sure you have a decent amount of savings set aside so that even your single income isn’t shaken when and if disaster strikes.