My wife and I have a lot to be grateful for, we have a beautiful home and we don’t really have to worry about money to a large extent, even though neither of us take a great income from our 9 to 5s.
We love our food and are able to treat ourselves to a nice meal on a Saturday night and I’m able to put some money into savings at the end of the month and some into a Stocks and Shares ISA.
Unfortunately, through no fault of our own, my wife and I have recently had to deal with a temporary drop in income, which will hopefully be resolved soon.
Taking a two income household for granted
Not being able to do the things that we want to do has never been at the forefront of our minds, we’ve probably taken for granted that we are always going to have two incomes coming into the household.
We have also been of the view that this would increase when I was eventually able to either find myself a better paying job or my passive income streams started to pay off, but these last few months have certainly got me thinking about the future and our current circumstances. It has certainly made me realise that we are probably walking a thin tightrope from month to month.
As nice as is it to consider what might be, we can’t detach ourselves from what is going on in the now.
Can’t spend, won’t spend
I can’t remember a time where I haven’t been considered tight and don’t do myself any favours by playing up to this sometimes.
I don’t really have any trouble spending, in fact I quite enjoy it sometimes, I just like to know that when I do I’m getting value for money or piece of mind that I’m not being ripped off.
I’ll research and research again to the extent that by the time that I do eventually come to making a purchasing decision there will be a newer product or service available.
We’ve also been burnt by cowboys, so I’m distrusting of most people that want to charge me for work that needs doing around the house, I’m a lifelong pen pusher so it’s probably time I figured out how a screwdriver works.
The power tracking your spending
If you don’t keep a track of your spending, it’s easy to get carried away and spend more than you earn and this is where a budget can be your best friend. It can become habit forming too.
I track everything and I mean everything I spend with an app on my phone and reconcile against my bank account at least three or four times a week.
You don’t have track your spending this way, there are many other ways that you can track your expenses and you should find one that works for you, whether this is a simple excel spreadsheet or good old pen and paper.
As well as tracking your spending, below are some ideas that might help you manage a drop in income.
Reduce supermarket spend/ try supermarket own brands
When I lived at home, I wouldn’t even contemplate the idea of eating something that wasn’t made by a brand I’d heard of? In my mind these brands had spent years perfecting their recipes to make sure that their product was better than that of the competition.
It was only as I got older I really understood the concept of marketing and branding that my view changed.
First moving out and doing my supermarket shop was somewhat alien, but I bit the bullet and decided to try supermarket own brands as my budget wasn’t limitless.
It was an eye opener so say the least. Some of my favourite brands not only fared worst in taste comparisons they were sometimes unhealthier too.
My wife had a different view and could not be swayed on the fact that brands didn’t’ automatically mean better and as a result our average food shop was in excess of £100. This amount was crazy bearing in mind there is just the two of us.
Looking back now, I’m not sure what we actually bought that made the weekly cost so much.
Whether it’s my influence or Shop Well for Less, we now don’t hesitate to buy supermarket own brands and have cut our weekly bill by more than half as a result.
Use what’s in your fridge/freezer
We’re all guilty to some extent of doing a shop based purely on what we buy every week and if you do a shop online they make this even easier by grouping together what you buy regularly or what was in your last basket so all you have to do is give the supermarket your card details.
When you do you next shop, stop and look in your fridge and freezer to see whether you need that extra bag of chips or that extra packet of fish fingers.
Also remember that use by dates are different to that of best before dates and use your own judgement.
Anything passed its use by date should be discarded as it could be possibly unsafe to eat, anything past its best before date will be completely fine but might not be of the same quality as it was when it was first bought.
Don’t be afraid of going frozen or tinned
Along the same line as checking in your freezer above. We can decrease a lot of our food wastage by actually buying our vegetables frozen and freezing those items that are reaching their best by date (even food kept in the freezer might be unsafe if kept past its use by date).
In the UK we throw away 7 tonnes of food, most of which is edible, which is just unacceptable.
There are some that will probably say that they just don’t taste the same, these people must have fantastic taste buds because I can never taste the difference and they are just as nutrient rich as their fresh counterparts but obviously last longer, which in turn is kinder on your pockets.
Cancel or reduce standing orders & direct debits
This can be tricky, depending whether you tied into a contract, but it is always worthwhile carrying out a review of everything that goes out of your account and seeing whether there is anything that you have forgotten about that is still being taken out of your account or whether there is anything that you can decrease payment on.
I recently did a little review and was able to slash a standing order by £50 per month.
Use cashback websites
These are great sites that allow you to get cashback on purchases you were going to make anyway.
You don’t pay anymore for the product at checkout either. These sites make commission on referrals that they make and pass some of that to you, the customer.
Review essential expenses
Whether you rent or own a property you are going to need to pay those pesky bills if you don’t want to get cut off.
The internet has put the power in your hands so there is no excuse to be overcharged by those companies that rely on those people that are still loyal even though that same company shows no loyalty to its customers and there are certainly a fair few out there.
Do more free activities
Instead of spending your weekend walking or being dragged around the shops.
Go for a walk at your local park. This is great for me as I’m a dog lover and the park near my mum’s place is a dog walkers paradise. Maybe not so good for my wife as she isn’t the biggest fan of dogs, but I’m slowly getting her around to my way of thinking.
If you struggle to think of free things to do, simply google “free things to do in” + your city, you’ll be amazed at what actually is going on in your city some of which you probably wouldn’t have even thought about.
Subscribe to a film/tv subscription package
It might seem strange actually telling you to spend more money to save money but if you are regular cinema goers but are going to spend a small fortune.
Granted you are not going to see the latest releases as they come out in its full cinematic glory, but is that really a bad thing? i know for those film fans out there it will be but unfortunately temporary sacrifices are a must when you are trying to manage on a decreased income.
These are just a few things that I have done to make sure that my wife and I are able to manage while our household income has dropped temporarily.
If you have any suggestions that you think might help others that find themselves with a sudden decrease in their household income, please feel free to leave it in the comments section below.