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Guidance

Adjusting to life on a single income

Adjusting to life on a single income

If your circumstances change quickly, leaving you having to manage on one income, it might feel difficult to know where to begin.

Step 1: List out all your financial information

Knowledge is key and getting all your documents together will mean you can be confident that you’re not missing anything. Some of this stuff may be online, if it is make sure you have easy access. What you want to find:

  • Bank statements
  • Bills
  • Property paperwork
  • Tax records
  • Insurance policies and will and estate plans
  • Superannuation details
  • Investment paperwork.

Step 2: Create a new budget

Now that you’re on one income your costs may also be changing. Draw up a new budget based on your circumstances. Be realistic about what you spend, setting unrealistic targets may just make things harder.

Step 3: Identify sacrifices

If the difference between your income and your spending is looking slim (or non-existent) in your new budget it is worth going through and identifying what items are needs and what items are want. Try to cut back on the wants so that you can give yourself a buffer and start saving. A good place to start could be the 50-30-20 guide which helps break down your spending.

Step 4: Set yourself goals

Your goals for the future are likely to have changed too. Write down new goals to keep you on track for months ahead. If you like, you can start small and work your way up. What’s important is to get in the practise of managing your costs and putting money away.

Step 5: Speak to someone who can help

There are a range of people out there who can help you put a plan together and give you advice if you’re struggling. Even if things are looking really good it can be worth chatting to someone you trust to sense check your plan.

The government offers free financial counselling services.

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice.