How to Manage Money in a Single-Earner Family

Single-earner families must learn vital money managing skills.

Two-income families face enough of a challenge keeping finances in line. A single-wage earner, however, must face these struggles alone. Single-earner families face a challenge that many families with two wage earners are not familiar with. Single income families must manage their money carefully to avoid financial shortcomings. These families must learn vital money managing skills to succeed with their personal finances.

Things You'll Need

• Earnings statements
• Personal computer
• Monthly bills
• Personal checkbook
• Coupons

Instructions

Create a Budget

1. Calculate the amount that is earned by the sole wage earner. This information can be collected from earnings statements or check stubs received from the employer.

2. Calculate the amount of monthly bills that the family must pay during the month. The amounts can be obtained from monthly statements that are received from various utility providers, credit card companies, banks and other creditors.

3. Use computer software, such as a spreadsheet or financial software, to create a budget. The total of expenses should not be greater than the income generated by the wage earner.

Prioritize Expenses

1. Determine the highest priority expenses that are incurred by the family. The most important expenses should be paid first. Examples of important expenses include housing, food and medical expenses. Ensure that the highest priority expenses are paid timely. It is essential that family necessities are paid to prevent the disconnection of necessary services. Family safety is of utmost priority.

2. Avoid low-priority problem areas such as dining out, entertainment and other unnecessary expenses. These areas can be alluring, but can hamper a single-income budget.

3. Contact creditors if you are not able to pay them immediately. Many creditors are willing to develop payment arrangements if money is not available.

Spend Frugally

1. Look for discounts when shopping for food and clothing. Coupons can save large sums of money at the grocery store and clothing retail stores. Shop for clothing and food at discount stores. These types of stores often purchase closeout merchandise that they resell at deeply discounted prices. Buy second-hand clothing for everyday wear.

2. Research ways to cut expenses for other everyday necessities. Find out about energy-saving techniques at home. Purchase a programmable thermostat to reduce utility costs. Plan on completing multiple tasks when driving to a particular area to save on gas. Buy generic brands of groceries or buy non-perishable items in bulk that cost less per ounce or unit.

3. Find creative ways to accomplish activities at home that were previously done by cost, including exercise, eating out and various types of entertainment.

Tips & Warnings

• Purchase Sunday newspapers to get weekly coupons.

References

• Consumer Credit Counseling Service: How to Make a Budget and Save Money
• Bank Rate: Paying Your Bills -- Which Bill to Pay First When Money's Tight
• Federal Trade Commission: Knee Deep in Debt; February 2011
• Money Crashers: 31 Ways to be Frugal and Save Money
• US News and World Report: Avoid Temptation -- 10 Smart Ways to Improve Your Budget