How to Live Frugally on One Income in 2020
So, you’ve decided to join the many Americans who who’ve made the transition from living on multiple paychecks down to one.
You’ve decided to let go of one income to handle more of childcare or maybe to manage other family obligations.
Or perhaps one of the family’s breadwinners has lost a job and now you’re wondering how to live frugally on one income? Is one-income living possible for your family?
Welcome! You’re in the right place!
Who am I to tell you about how to live frugally on one income?
My husband and I have lived almost our entire married lives on one small income, and we have proven it is possible.
I only worked outside the home for a short time and later decided it would be better for me to stay home for my kid and career goals. I wanted to stay home and find a work-from-home job that fits my skills.
When we became a one-income family with one child, our gross income was only between $25,000 and $35,000 per year. I only share these numbers to give you a frame of reference.
I know that some families, most especially those who have lots of existing obligations such as debts, find it impossible to live on these numbers. But I also know that some families can even live on less.
Honestly speaking, if we were not being frugal, this income would NEVER be enough.
But we’ve adopted lots of ways for living frugally and learned the magic formula to live on as little as $1000 per month. You can read our 50 best frugal living tips here!
I am not claiming it is easy to live frugally on a single income, but it can be done for most people. You just need to learn the best strategies on how to live frugally on one income that work for you!
Things to Consider Before Taking the Leap
Make a plan for an emergency fund
Going from two incomes to one can require some financial adjustments so it’s important that you and you spouse create a plan of action.
While you may lose one income stream, the bills will continue to come. Lay down your options on the table and decide on what best fits your new financial lifestyle.
To start with, you’ll have to establish and beef up your emergency fund. You can read more about how I started an emergency fund with no money here.
Life happens, and you wouldn’t want to get caught up empty-handed during an emergency.
When the roof leaks, the car needs repair or when you need to take a family member to the ER, you’d want to have some money on hand, just in case.
Otherwise, you might resort to taking on more debts, which is not ideal, especially now that you only have one income.
Plan for debts and other financial obligations
If you still have debts to pay, make sure that you can still do your financial obligations when your family income is reduced to one paycheck.
Come up with a new debt repayment plan that caters to your new financial set-up. Learning how to live frugally and pay off debt is essential so you can keep making financial progress even with limited income.
Finally, consider looking into your other financial obligations, such as insurance.
It helps to determine whether you need the same coverage, or if it helps to switch to a new policy or company where you can get ample coverage but with lesser costs.
Create a new budget
If you used to live on two incomes, then your existing budget may not apply to your new one-income set-up.
Right now, you have different needs and priorities, so these must be reflected in your new budget.
Begin tracking your expenses and record them. Analyze your spending to determine how much you need to allocate in each category.
Be realistic with how much you need and practice self-control so you can truly live within your means.
Make the transition in stages
If you haven’t completely jumped into the single income lifestyle, you could do a trial run first.
Give yourself two to three months living as if you only have one steady income (a good opportunity to also put the money one of you is earning into that emergency fund or pay off a major debt!).
This can give you ample time to see whether your tight budget is working for you and if you can indeed afford to live on one income very soon.
Something worth trying before you make the jump to a single income is to start cutting costs early, giving you a pretty good idea of how you’ll fare once you’re living on less.
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Strategies on How to Live Frugally on One Income
When you’re letting go of one of your paychecks, it means you’re going to lose thousands per month. You need to focus your energy on areas where you can get as much money back into your pocket.
Let’s start this list with frugal living tips that will help you save a lot of money!
1. Downsize or move to a cheaper house
If you live in an expensive neighborhood, your house is too big for your family or your rent/mortgage is too high, decide whether these expenses are worth it.
Otherwise, consider downsizing, moving to a cheaper apartment (if renting), or selling your house and moving to a cheaper neighborhood.
If moving is not an option, here are a few things you can do to lower your housing expenses:
- Negotiate your rent (if renting).
- Refinance your mortgage to save money on interest rates.
- Rent out your extra space on Airbnb. See how much your property can make on Airbnb here.
- Get a roommate.
Downsizing may be a scary decision but when done right, it can help you save money on homeowners association fees, maintenance, property taxes, rent, mortgage and more!
2. Cut back on eating out
Do you constantly blow your money at restaurants? If so, start thinking of how you can back on this expense!
According to 2017 data from the Bureau of Statistics, the average American household spends $3,365 on average on dining out per year. You could pocket that money by cooking more at home!
Some of the strategies we use to avoid eating out include:
Meal planning. Plan your meals for the entire week, create a shopping list and stick to it! Not only does this help you avoid eating out, it can also help you avoid buying extra food you might only waste. Meal planning is also a great strategy to help you follow a healthy diet, which benefits your body as well.
Putting an evening meal in the instant pot. Dump the ingredients in the instant pot or slow cooker in the morning and come home to a sumptuous meal later!
Meal prepping. Spend a few hours on the weekend prepping your lunches for the week. Having food ready in the fridge will help reduce the urge to eat out!
3. Cut cable and save $50-100 per month!
We cut the cord over five years ago because we really could not justify this expense.
Instead of paying $50-$100 per month on cable, we decided to spend this money somewhere else by using streaming services like Hulu. We have been saving at least $800 per year!
If you want to learn how to live frugally on one income, you need to know that there are better and cheaper alternatives to cable.
There’s Netflix where you can watch lots of movies and shows for only $8 per month for a basic package.
There’s also Hulu which costs $5.99 monthly (Basic Plan) with the option to add $4 to watch commercial-free. And then there’s Amazon Prime which not only gives you access to thousands of movies and TV series for only $99 a year; you also get free cloud storage with your account.
If you’re convinced it is time for you to also cut the cord, follow these steps:
- Get a streaming device such as Amazon Fire TV Stick, Roku or Apple TV. Except for the Apple TV which costs over $150, most streaming devices only cost around $50.
- Select a streaming service such as Amazon, Hulu, Netflix and HBO. We switch between these services depending on which offers the movies or shows we want to watch.
You can skip using a streaming device, too, and just watch movies and shows on your computer! But I recommend getting one since it is more convenient and allows you to stream shows on your TV.
4. Create a meal plan around cheaper ingredients
Creating a meal plan around cheaper ingredients can help you lower your food cost. For example, if avocados are expensive, find cheaper alternatives so you can pocket the extra dollars.
What I usually do is check out the store circulars to have an idea on what I could buy for the week that are cheaper. Then, I create a meal plan around the cheaper ingredients!
If you are new to meal planning or too busy to create your weekly meal plan, there’s a cheap service called the $5 Meal Plan which can help you get started.
For only $5 a month, Erin from the $5 Meal Plan will email your weekly BUDGET meal plan where each delicious meal will only cost $2 per person or $5 per family, thus helping you save money and time.
You can try their 14-day free trial here to see if it works for you. Otherwise, cancel your subscription before the trial ends.
5. Find Cheaper Entertainment
According to the Bureau of Labor and Statistics, the average American household spends $2,827 per year on entertainment.
Entertainment is a variable spending category that could take a hit if you want to learn how to live frugally on one income. But not if you know where to look for cheap entertainment.
Instead of spending top money on concerts, cinemas, and fine dining, you can still have the best of life without breaking the bank through free activities such as going to the beach or park, or playing sports at your town’s sports facilities which are often free to use.
You can also take advantage of discount deals at Groupon’s Things to Do.
Groupon offers discount coupons and deals for high-quality, low-cost entertainment options from beauty and spa, to dining and tours.
6. Do It Yourself
This is probably my most favorite tip on how to live frugally on one income: take the time to learn a few simple DIY skills!
Learning basic car maintenance such as oil change, for example, can save you up to $120 per year.
We save a lot of money by becoming our own carpenter, plumber or gardener. You can save money by DIYing things such as:
- Pet grooming – $20-50
- Haircut – $10-$30 per salon visit
- Grass trimming- Save $50 per month
- Home maintenance such as cleaning the gutter
- Childcare – Thousands a year!
- Filing your taxes – $150 per year!
- Car washing – $100 per year
Before you hire help, YouTube it first or do a quick research online. You’ll be surprised to find lots of free how-to videos and articles online that will walk you through DIYing or fixing things.
You will not only save money but also learn skills!
7. Use your spare time to make money
If you cut every expense from your budget but still can’t pay your bills, consider using your spare time to make extra cash from home.
The good thing is that nowadays there are lots of extra income ideas that you can do from home or online. Many online side hustle are flexible and can be done on your own time!
I wrote a lot of posts about making money from home because it’s what I do and I love being able to make an income without leaving home or when I want to.
If you want to use your spare time to make money, check out the following posts:
- How to Make $100 Per Day Online
- 15 Tried and Tested Stay at Home Mom Jobs that Pay Well
- Legitimate Survey Sites to Make $300 per Month
- Entry Level Jobs – No Experience Jobs to Make Money at Home
- 8 Real Ways to Make Money with Amazon
8. Sell your car or use only one car
Do you really need more than one car? Maybe you do. But now that one of the family’s breadwinners stay home, it might make sense to sell one car most especially if you still have a car payment.
My husband and I have only been using one car for 10 years now, and this was one of the best financial decisions we made! Not convinced? These numbers below might change your mind:
According to a recent report from AAA, it costs $9,282 per year ($773.50 per month) to own or run a new car.
It might sound incredulous, but it does make sense when you think of the depreciation cost.
According to the study, cars lose an average of $3,759 per year on depreciation cost, which accounts the largest ownership cost.
Then, there are also other expenses to account for such as:
- Insurance: $1,222 per year
- Tires: $150 per year
- Maintenance: $792 per year
- License/ Registration/Taxes: $687
You can read more about this study on the cost of car ownership here.
Other Useful Tips on How to Live Frugally on One Income
If you really want to learn how live to live more frugally on one income, you also have to recognize the importance of having a “no saving is too small” attitude.
Remember that no matter how small the savings, they easily add up to an overall positive impact on your finances.
I have outlined below a few money hacks and frugal living tips you can use to scale back on a few expenses and save money every day!
9. Use Ibotta ( Receive $10 free)
Ibotta is a free app that pays you for buying groceries as you normally would. It sounds unbelievable but it’s true!
I’ve been using Ibotta for two years now and it has paid me over $800 in cash back and bonuses!
Ibotta partnered with hundreds of grocery stores , such as Walmart, Sam’s Club, Costco , in over 500,000 locations so there are lots of places where you can use this app to save money. You can also use it for online purchases.
If you’re wondering how Ibotta makes money, Ibotta’s partner stores pay them a commission for the purchases you made at the stores. Ibotta then splits this commission with you in the form of cash back.
You can sign up with Ibotta through my link here. A bonus? Ibotta will give you $10 FREE after scanning your first grocery receipt.
If you want to learn more about Ibotta, I recommend reading my Ibotta Review here where I also talk about Ibotta trips and tricks to help you increase your savings.
10. Use Swagbucks to get your Starbucks coffee fix at $0
Learning how to live frugally on one income might give you the impression that you can only enjoy your coffee at home. After all, those $5 lattes and cappuccinos do add up.
But if you can’t resist the pull of coffee, but want to get it for free, then learn how to get free Starbucks gift cards! There plenty of ways to earn free Starbucks gift cards and one of my favorites is using apps like Swagbucks.
To earn free gift Starbucks gift cards through Swagbucks, you just need to complete small and short tasks, such as:
- Watching a short commercial
- Surfing the web through their proprietary browser or extension
- Going shopping with your account linked to their app
- Answering surveys to help brands improve their products
Do these mindless, often effortless tasks and you would be earning gift cards that’ll get you branded coffee for zero dollars.
11. Save up to 15% on regular purchases through Amazon Subscribe and Save
We all know the old trick in the book: make a list and stick to it. I think this is essential and I swear by it. But did you know that you could also save more money if you opt to have your purchases delivered to your doorstep through Amazon Subscribe and Save?
This is a program that allows you to purchase everyday products from Amazon, like coffee, cleaning products, kitchen towels, etc., at a pre-determined recurring time such as weekly, monthly or every three months.
Amazon lets you save up to 15% from these purchases and even gives you the convenience of having the products delivered to your home. And since you won’t be making multiple purchases at the store anymore, you also save money on gas!
12. Save up to 50% off your restaurant meal
On nights you eat out, grab a coupon or deal from Groupon to save up to 50% off your meal!
13. Save at least $50 per month by not buying bottled water (save the environment, too!)
It costs at least $50 per person per month to drink water from a bottle and more for large families. You can save a lot of money by investing in a good water filtering system at home and a reusable water bottle.
14. Buy fresh in-season produce
Buy in-season produce to freeze, pickle, can or preserve for future recipes.
15. Save up To 40% on your online purchases (Receive $10 FREE today)
When you shop online and do it through cashback online portals like Rakuten (formerly known as Ebates), you could earn up to 40% cash back from your purchases.
Since you would be purchasing anyway, why not go through this simple and quick process and earn some rebates? It’s also great to keep Rakuten running on the background as a browser extension so you would be alerted of great deals each time you go online shopping.
Rakuten has paid me over $160 for my Amazon purchases! You can read my Rakuten Review here.
16. Rack up FREE Gift cards from your regular purchases
If you want to keep earning points and rewards from your spending without having to exert much effort, then it’s best to keep the Drop app up and running. It’s essentially an app that links to your credit or debit card.
Once you get the app linked to your account, Drop will compile your points and allow you to redeem them as gift cards when you’ve reached a certain threshold. This app doesn’t even cost you anything, yet it lets you earn points, which translates to more money and more savings.
17. Save $10 at the drug store
Did you know that Ibotta could also help you save money on drug store purchases? If you frequent Wagreens, CVS pharmacy and other pharmacies, you could earn cash back on your purchases and earn $0.25 to $0.50 for loading a receipt.
So, next time you are stocking up on shampoo, vitamins and other drug store products, don’t forget to scan your receipt to earn free money!
Get $10 FREE here when you use this Ibotta code fnwchum.
18. Don’t miss any savings when prices drop
Paid full price for an item, only to find out a day or days later that its price dropped? Use this FREE app called Paribus so you’ll never miss any savings when prices drop.
Paribus automatically gets shoppers the adjustment amount they are owed should an item they purchased drop in price at a later time.
19. Drink more water but stop buying bottled water
You could easily save $10 per week if you stop buying bottled water. Drinking more water is also good for your health!
20. Save up to 85% by going generic
Generic pasta, cereals, cleaning products, cheese, condiments and other products are significantly less expensive that branded ones. You may be surprised you can’t tell the difference between store-brand and brand-name items!
Try generic medicines, too. According to the FDA, which tightly regulates generic drugs to ensure they meet the same quality standards as name-brand medications, the price of generic drugs is 80-85% less than brand name medicines.
21. Let a robot help you lower your bills!
If you don’t want to cut your cable, try Trim to lower your cable bill. Trim is an AI-driven financial assistant that can negotiate your bill down for you. It works with Comcast, Time Warner, Charter, and any other provider and has saved over $1 million dollars in the last month.
You can try it for FREE and put money back into your pocket without cutting cable.
22. Indulge in cheaper vacations
Is vacation taking the backseat now that you want your family to learn how to live frugally on one income? You can always make a compromise.
Go on holidays, but make sure you don’t go overboard with the spending. In fact, you can still enjoy your vacations and have fun, while saving a couple of dollars by opting for non-hotel accommodations, such as in rental properties listed on Airbnb and booking.com.
23. Spend $0 for internet
I’ve learned a lot of cool tips on how to get free Internet legally. If you are in the US, try these zero-cost options to get internet connection and save at least $50 per month!
24. Cut gym membership and exercise without having to pay a dime
According to data from Statistica, 67% of people (US) with gym memberships never use them and that, on average, gym membership owners go the gym only twice per week. Are you one of these people? Unless you really use your membership, I recommend replacing your membership with free fitness activities.
Monthly spending for gym memberships range from $30 – $100+ per month, depending on where you go. Eliminating this expense could help you save $500 per year easily.
25. Buy discount gift cards
Using discount gift cards when eating out is a great money saver! For example, if you frequent Applebees, buy a $25 restaurant gift card online through sites like Swagbucks to save 20% or more!
26. Practice preventive care
Statistics show that in 2006 alone, health care expenditure was over $7000 per person. Moreover, according to Consumer Healthcare Product Association, on average, U.S. households spend about $338 per year on OTC products.
We can avoid these expenses by practicing preventive care. Schedule regular checkups and exercise healthy habits to avoid medical expenses. Preventive care also extends to your vehicles to avoid unneeded expenses.
27. Get $30 on your first Lyft Ride with Rakuten
Do you often use Lyft? If so, ride Lyft through Rakuten and Rakuten will give you $20 on your first ride using Rakuten, plus a $10 bonus for just signing up through this link. That’s $30 FREE you could receive today! Rakuten will also pay you $0.25 per ride thereafter!
28. Save your spare change automatically with Acorns
Acorns is an investment app that helps you save and invest your spare change without thinking. Think of saving your spare change in a piggy bank, Acorns is the digital version of it.
If you spent $3.80 for a coffee using the credit/debit card you linked to Acorns, Acorns will see the transaction, transfers the spare change of $0.20 to your Acorns account. When your account hits $5, Acorns will withdraw the money and invest it.
If you find it difficult to save money, Acorns is a cool app to use to trick yourself into saving money.
You can read my Acorns Review here.
How to Live Frugally on One Income and Still Be Happy
Some people question how to live frugally and happy because they believe they need all the income they can get to buy happiness. There’s nothing wrong with that, but when your life takes a different turn, and you have to survive on one income, then you have to make do with what you have, be more creative and resourceful, and at the same time, find happiness with what you have.
Living off on one paycheck can be radically different than what you were used to, but it also isn’t as bad or hard as it seems. It may take some adjustments, discipline and perhaps a healthier and more positive mindset.
Yes, living on one income has its trade-offs, but the less you stress about it and the more you strive to make your circumstances work, then you’ll realize that you can be frugal but not cheap, and still be happy.
I would love to hear from you!
Do you have tips on how to live frugally on one income? What’s your favorite frugal living tips to thrive on a single income lifestyle?