Strategies for Living on One Income (2024)

FAQs

Strategies for Living on One Income? ›

Try a zero-sum budget

With a zero-based budget, your income and expenses should even out so there's nothing left over at the end of the month. The trick is to treat your savings goals as expenses. For example, your “expenses” may include building an emergency fund, vacation, or homeownership.

Try a zero-sum budget

With a zero-based budget, your income and expenses should even out so there's nothing left over at the end of the month. The trick is to treat your savings goals as expenses. For example, your “expenses” may include building an emergency fund, vacation, or homeownership.

This belief is supported by a widely publicized 2010 study led by Daniel Kahneman and his Princeton colleague, Angus Deaton — both winners of the Nobel Prize in Economics — which concluded that happiness only increases with income up to $75,000.

If you're living within your means, you have enough money to cover all expenses. By adopting a personal finance plan and sticking to it, you can know your basic needs are covered along with other financial priorities.

Published Mar 21, 2024. To live “comfortably” as a single person in 99 of the largest U.S. metro areas, you'll need a median income of $93,933, according to a recent SmartAsset analysis.

“Relying on a single income source can be risky, especially in an uncertain economic climate,” said Taylor Kovar, CFP, CEO and founder of Kovar Wealth Management. Things like job loss, industry downturns or unexpected life events can significantly impact financial stability.

What is the 50 30 20 rule? ›

The 50/30/20 budget rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must have or must do. The remaining half should be split between savings and debt repayment (20%) and everything else that you might want (30%).

In a series of tweets, Ramsey suggested budgeting for food, utilities, shelter and transportation — in that specific order. “I call these budget categories the 'Four Walls. ' Focus on taking care of these FIRST, and in this specific order… especially if you're going through a tough financial season,” the tweet read.

Consider an individual who takes home $5,000 a month. Applying the 50/30/20 rule would give them a monthly budget of: 50% for mandatory expenses = $2,500. 20% to savings and debt repayment = $1,000.

Lower or eliminate costs, such as unused subscriptions or gym memberships. Make savings work for you. Commuting and childcare costs may not be what they were if one partner is now home. Put any savings from situations like that in an interest-bearing savings account or use the extra money to pay down debt.

Pew Research considers middle class to be $56,000 to $156,000 for families of three. Thus, a family of three on $20,000 is not middle-class; it's actually below the poverty level. While an individual on $20,000 a year is not below the poverty line, they are still not considered middle-class.

The U.S. Department of Health and Human Services uses the Census Bureau threshold to determine who is eligible for certain government assistance programs, like SNAP (food stamps). Under their guidelines, a family of four is considered impoverished if they earn $30,000 or less per year.

But just how much does a single person in California need to make to live comfortably? A new study from Smart Asset determined that a person must make at least $ 89,190 to get by comfortably.

To live “comfortably” as a single person in 99 of the largest U.S. metro areas, you'll need a median income of $93,933, according to a recent SmartAsset analysis.

You'll need to earn more than half a million annually to be considered among the highest earning residents in 11 states and Washington, D.C. "This comes down to cost of living," Murray said.

An individual needs $96,500, on average, to live comfortably in a major U.S. city. That figure is even higher for families, who need to earn an average combined income of about $235,000 to support two adults and two children.