There are a variety of reasons why a couple might consider living off of one income, which can be a bit more challenging for both parties if you’re also striving towards an early retirement date.
If you are in a season of your life where an aging loved one needs more care, one spouse is going through some health problems or job loss, or your growing family needs more attention–it may mean that you widdle your earnings down to one income for a time, or perhaps permanently.
If you’re deciding whether or not can pursue FI on one income, or perhaps this is your new reality and you’re looking for ways to make it work, read on.
Weigh the costs and benefits
If you are facing a situation where you currently do have the choice between one income or two, it’s worth running the numbers to see how living off of one income would impact your FI date.
Living off of one income may seem troublesome, but you can also tally up how much you will save as a household on care costs by having one member do the care-taking. Caring for an aging parent can be even more expensive than daycare, even with good insurance–so do the math to see what would be more cost effective.
While at first, seeing your timeline get longer can feel disheartening, it’s helpful to remember that there’s more to FI than dollars alone. While it may be a bit deflating to see your timeline grow longer, there is something to be said about the power of even being able to make this choice.
Additionally, there are plenty of intangibles involved–like knowing you’re being there for an ailing loved one, or homeschooling your children, which money can’t buy.
Spend less and earn more
If you’re scaling back to one income, frugality is a useful tool since often, being wise about every penny spent is the most effective way to put your money to work even if that income is spread thin. Focusing on marginal gains instead of extreme frugality is a great way to make the adjustments needed without going into shock.
Each month, instead of giving up toilet paper or refusing to run the A/C, simply focus on getting 1% better with how you earn, save, and invest the money you do have coming in. How can you be a little smarter each month and get everyone involved? Marginal gains add up!
Even if one person has to leave full or part time work, that doesn’t mean that they are relegated to earning $0 whatsoever. Could a side hustle be implemented? A room rented? If you’re caring for a family member, could you also provide care to others for payment?
Several stay at home parents also have dabbled in running day care at home or dog sitting to supplement their years at home with small children.
Remember your why
If you’re feeling stressed or nervous that living on one income will ruin your FI date, it’s important to reconnect with why you want to pursue financial independence in the first place.
- Why do you want to reach FI?
- Is it so that you can live life on your terms?
- Be there for your family?
- Have the freedom to do what you want?
If that’s the case–realize that’s precisely what you’re doing right now. Being with a family member or taking time off is a core value and your money is now being aligned with that value. FI itself is not a magical finish line where life is perfect, happy and clear–your life now shouldn’t be too different from life after FI, so stay in touch with why you choose to live this lifestyle and see that you’re walking the walk now.
For some of us, it's absolutely fine to blend our pre and post FI lives if it enables us to be the people we want to be and live the values we treasure most. Luckily, FI doesn't have to be a number or a finish line, it can be a way of life and a journey of your own making.
Remember it’s not forever
If you’re living on one income, it's likely just for a fixed amount of time and could change. Eventually, little ones grow up and go off to school, sick relatives can get better, job markets change, and situations evolve over time.
While living off of one income can be stressful and challenging when you’re trying to hit your FI number, it doesn’t have to be forever. There will be time to play catch up later or get creative with your income streams, but you can’t buy this time back–so do your best to be confident in your decision. You don’t need to feel the FI FOMO, you’re on your own unique path!
It’s a highly personal decision, and no matter what you choose, the FI community is here for you!
We hope this article helps, but if you’re still weighing your options, come to the ChooseFI Facebook group and get some feedback or ideas.
- The FI Roadmap For Your 20's
- Why You Should Pursue FI Even If You Can't Retire Early
- How FI Is Different Than Personal Finance