"Is one income enough these days?" is a question I've been asked a lot. In this week's piece, I want to answer it. In the past, families usually got by with just one income, which was usually the man's. Having said that, with the way things are economically now, this plan seems less and less likely to work, especially for families with kids.
The Change from the Past to the Present
A family's wants could often be met by a single income in the past. This was possible because of different economic conditions, lower living costs, and different standards for how people should live.
These days, it's hard for many families to get by with just one income. Some of the things that are causing this are:
• Inflation: It makes a single income less valuable over time because the prices of goods and services keep going up. Almost everyone needs two incomes these days because costs have gone through the roof for everything from living to school.
• Changes in lifestyle: These days, things like advanced schooling, technology, and fun activities that cost extra are often seen as signs of comfort and success.
Real Life Examples
1. Let's look at a couple in the city who has two kids. Even though they make a good living, the costs of rent, childcare, and school make their budget very tight.
2. The Challenge of Being a Single Parent: It can be hard for single parents to make ends meet with just one income and child care duties. While government aid is nice, it's not always enough.
3. People who make a lot of money: Sometimes, one partner makes a lot more money than the other, which easily covers the family's costs. But this doesn't happen very often and is usually linked to jobs that are hard and stressful.
Help with money matters
1. Making a budget is important: No matter how much money you make, using a Forecast Spending Plan to make a good budget can help you better handle your money. Keep track of your spending, put needs ahead of wants, and make a plan to save money.
2. Savings and investments: Look into different ways to spend your money to make your savings grow. Putting away small amounts of money every month into a savings account or stock portfolio can add up to a big difference over time. Remember that you can only change a habit by making it better. In this case, the habit is saving money to spend.
3. Side jobs: If you want to make extra money, you could get a part-time job or start a side business. This can help protect your finances and give you more ways to make money. Making money off of your skills is something I really believe in and talk a lot about in my lesson.
4. Education and skill development: Keeping your skills up to date can help you get better jobs and make more money.
The answer to the question of whether one income is enough is complicated and depends on each person's situation. I think having one income is harder now than it was in the past, especially if you have a family. But I think that anyone can handle these kinds of money problems better if they make a good forecast spending plan and find side jobs that bring in extra money.
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Luca Caruana
Certified Money Coach (CMC)®