Can a one income family be financially stable? What habits do you need to develop?
Becoming a financially stable family should be the goal for everyone especially if you are living on one income. Fortunately, anyone can become financially secure as long as they are willing to adopt certain habits.
Like some of you, when we first became a one income family, our only goal was how to survive.
I became the sole provider for my family at a really bad time. It was so bad that any month I was able to make rent was a big month for us.
Back then, paying rent, keeping the lights on and feeding my kids were the most important goals for me.
The first couple of years we lived on one income, I didn’t worry about financial security. But, as things started to improve financially, I started thinking of ways I could make life better for us.
So I started asking questions like:
- How do I achieve financial stability?
- What are some good financial habits I need to develop?
- What are some bad financial habits I need to stop?
- How much money do you need to be financially stable?
As a result of asking these questions and also reading and learning about personal finance, I figured out some of the habits of financially stable families.
Here are some of the most important habits of financially stable families.
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7 HABITS OF FINANCIALLY STABLE ONE INCOME FAMILIES
1. THEY SAVE LIKE THEIR LIFE DEPENDED ON IT
As a one income family, saving money isn’t optional. It isn’t something you do only when you have some extra money to spare. Saving money should be a habit!
If you want to be financially secure, you have to save like your life depends on it because it very well could.
While it isn’t healthy to fret or worry about the unknown, when you are the sole provider for your family, it’s hard not to.
That’s why you need to be prepared for emergencies, and build up your savings as much as possible. Start with an emergency fund and save as much money as possible. I usually recommend saving between six to twelve months of your living expenses.
Of course the more money you can save the better.
Since your family depends on you financially, you have to be responsible so make sure you prioritize saving.
If you really want to take things up a notch, then you can automate your savings or make it a habit to pay yourself first.
Which means whenever you receive your paycheck or any income, you take out a fixed amount before you start paying your bills or anything else.
I know this may not be possible for everyone depending on your circumstances, but you have to find a way to set some money aside from every paycheck if you want to enjoy financial stability with your family.
So make a savings plan and stick to it. That should be one of your financial goals every year.
2. FINANCIALLY STABLE FAMILIES MAXIMIZE THEIR INCOME AND IMPROVE THEIR NET WORTH
Did you know that your income is the biggest wealth generating tool that you have?
Knowing how to maximize and invest a part of your income is one of the best ways to become financially secure.
When I talk about financial security or stability, I don’t mean financial independence where you never have to work again or you can retire at an early age.
For me, financial stability means not living close to the financial edge where any little challenge would send me into financial ruin.
Being financially stable means you can afford all your living expenses, achieve your financial goals, enjoy the things you love and still have some money to spare.
And the way to do it is by making smart decisions with your income.
There are lots of ways to maximize your income and improve your net worth. The first place to start is by reducing your expenses and debts.
When you can keep a reasonable portion of your income, then you can think of investing the surplus into income generating assets that will produce more income for you and your family.
This is one of the best ways to grow your income,increase your net worth and gain financial stability.
Yes, you can be financially stable even with a low income. Is it going to be more difficult and take longer?
But, if you put your mind to it and work really hard, it’s totally possible so don’t think because you earn a low income this is unachievable for you.
So work hard at reducing your spending and focus on growing your income and net worth.
3. THEY KEEP IMPROVING THEMSELVES SO THEY CAN EARN MORE
I know I said you can be financially stable on a low income, but it’s hard and takes a longer time.
You can become a financially stable family faster if you can increase your income. And, one of the things you can do to increase your income is to keep improving yourself.
So brainstorm some ways you can upgrade your existing skills or learn new skills if required.
How can you make yourself invaluable or indispensable to your employer? What can you do to get a pay raise or a promotion?
If you’re self employed or a business owner, what can you do to earn more income?
Spend some time thinking about this, then create a plan for improving yourself so you can earn more money.
Check out the posts below for some in-demand and other valuable skills you can learn.
4. FINANCIALLY STABLE FAMILIES DIVERSIFY THEIR INCOME
This habit is a whole topic by itself but I wanted to talk about it a little.
Unfortunately, it’s becoming increasingly difficult to rely on just one source of income. Because of too much uncertainty in the world right now, it’s a good idea to have more than one stream of income.
Diversify your income and create multiple streams of income (if possible). Find different ways to make money whether online on offline.
When you have different sources of income, it’s easier to keep surviving even when you lose one of them (especially if it isn’t your main source of income).
If you work a 9-5 job, it can be pretty challenging to find the time to work on a side business or build another stream of income, but it’s really important, so find a way to make it work.
Even if you can only spare an hour or two a day (or week) working on a side hustle, before you know it, you will be up and running and generating some extra income for you and your family.
More and more people are going down this route because of high cost of living and stagnant wages.
There are lots of two-income families who are looking for ways to earn additional income because their incomes isn’t enough to cover their expenses, so this isn’t something that affects only one income families.
If you don’t know how to get started creating a second or multiple streams of income, here are some helpful articles for you to check out.
5. THEY STAY OUT OF DEBT
One of the most common habits of financially stable people is their rejection of consumerism and debt.
It’s very difficult to achieve financial stability on one income (especially a low income), if you spend a good part of your income paying off debt.
I have talked a bit about debt (and why you should avoid or reduce it if you live on one income), so I won’t spend too much time here.
But the takeaway is, stay out of debt if you want to be financially secure. If you have existing debts, work out a plan to pay them off and use your income to create more income for you and your family.
If you need help or have no idea where to start, the resources below can help.
6. THEY LIVE BELOW THEIR MEANS
As a one income family, there are lots of good financial habits you should develop and one of them is living below your means.
When some people hear this, they think living below your means is the same as living a life of deprivation or being cheap.
They couldn’t be more wrong!
There’s nothing cheap about living below your means if that allows you to save more money and become financially stable.
When you live below your means, you don’t have to spend all your income buying the most expensive things you can afford, instead you buy the best quality you can afford for a reasonable price and save the difference.
When you live below your means, you are mindful of lifestyle inflation. You don’t go crazy when your income increases, instead you find ways to invest the surplus money so you can earn even more money and ease financial stress.
If you don’t know how to live below your means and you’re spending everything you earn, you need to take a step back and reassess your spending.
Living below your means is one of the most important habits to adopt if you want to live on one income successfully. So embrace it!
7. THE BEST HABIT OF FINANCIALLY STABLE FAMILIES? THEY KEEP THEMSELVES HEALTHY
Did you know that medical issues or medical debt is one of the main reasons most Americans file for bankruptcy?
A large medical debt can wipe you out financially so it’s really important for you to stay healthy especially if you are the breadwinner or sole provider for your family.
Since I literally can’t afford to be seriously sick, I do everything I can to keep myself and family healthy and safe.
That means, eating healthy meals as much as possible, exercising, getting enough rest, saying no to bad habits like smoking and drinking alcohol (it’s okay to drink in moderation, but I don’t drink at all).
Cutting down on junk food, processed foods and unhealthy foods can also save you a ton of money so it’s a win all around.
Staying healthy should be a priority for you and your family so if you have been neglecting your health, you need to stop doing that.
If you have medical conditions that are out of control or untreated, get yourself to a doctor as soon as you can and sort out those issues.
You need to be in good health to do all the other things in this post so that’s where you you need to start from.
Nothing else matters if you are sick so remember to take care of yourself first.
Final thoughts on habits of financially stable one income families
It’s possible to become financially secure if you adopt some good financial habits and get rid of bad money habits that sabotage your finances.
The seven habits above are some of the best financial habits anyone can develop so use them to turn your financial life around so you can live well on one income.
Which is your favorite habit?