People decide to leave the workplace for many reasons or a life event happens which means transitioning to one income.
It can be due to a divorce, to become a stay at home parent or a spouse going back to school. It can be a big adjustment to switch from two incomes to one.
David Sant with Cyprus Credit Union joined us with things to consider when transitioning to one income.
1. Do your homework
• How will this affect your lifestyle
• What adjustments need to be made to cover bills and basics
2. Budget, budget, budget
• Find the budget that works for you, there are many to choose from
i. Envelope system - cash in envelopes for each category
ii. Zero balance - Goal to be at zero dollars at end of month
1. All extra goes to savings or paying off debt
3. Meet with specialists
• Will this change your tax brackets? What impact will this have on your deductions? Schedule a meeting with your tax specialist to answer these questions
• What is the impact on your retirement plans? Schedule a meeting to plan retirement based on one income.
4. Identify where you might save
• Savings from child care costs
i. Daycare can cost $10,000 on average a year
• Savings from eating at home
You can find more information at cypruscu.com