Monday, February 1, 2010

4 Tips to Living On Half of an Income

My story of living on half an income

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For 14 years I was married and then our marriage ended and my income was reduced to a little less than half. Alimony payments are still plentiful, for which I am very thankful. My income is now split almost in half. Even though I knew I would survive, I did not know how I was going to pay the bills. Racking up credit card bills and payday loans were not the answer, even though I was in a financial mess. My already large pile of debts did not need any more debts, so I looked for a better way to survive. A better way needed to be found, even though these loans could have helped me through the rough patch.

Reduce housing costs

During the split, I was involved with another for a small period of time, who lived in Middle America. I moved my family, without the ex, to Small Town USA because of this. The three bedroom house on a three acre property now only costs about a fourth of the price that the house in the big city cost. Because of this, I was able to get my living expenses down to a manageable level. Drastically reduce your housing costs should your income be brought down by half.

Cut back on transportation costs

Around the same time that we split, we had a huge car payment on a new vehicle that we were struggling to keep up with. A lack of payments made the car have to go back. My vehicle that I got to replace the other car is ready to give up the ghost. I only paid $ 500 for it. The only car costs that I pay for now is gas once per month. What is now different compared to before? Since I work from home as a freelance writer, I only use the car about once a week to get groceries and do laundry. I do not have to travel very far to get my errands done each week. Payday loans for gas become few and far between when not driving much.

Cut back on utilities

Since I moved to a smaller house, utility costs were automatically reduced, leaving me able to increase how much cable and internet I could have. The heating bill decreased because of some things I did to the house. The drafty windows were covered with plastic. The door I do not use is covered with a heavy blanket. The cold drafts under the kitchen counter were sealed with a special foam made for this purpose. The cold pockets of the house now have space heaters. Now, I do not have to turn up the thermostat as high and I save over $ 100 per month just in heating costs.

Cut back on food costs

One of the biggest items in a budget, besides housing, is the food budget. Going out to eat was preferred to cooking at home. This happened while I was still tied down. Cooking at home has become the norm now that my income has changed. Going out to eat now is saved for only special occasions. I stopped buying junk food, which helped to decrease my food budget. This helped us save money and get healthy. I did not want to buy pre made food any longer, so I was able to trim the budget further by cooking from scratch.

The end result

In the effort to bring down my expenses to meet my income, I have effectively come way under budget. I am now able to put away money to buy a decent car. If you have been wondering how much money I am really getting, I will tell you. I get $ 2,000 per month from my ex, and $ 800 from my online work. The best part about this, however, is that my monthly expenses come to about $ 1,700 to $ 1,800. If you were to take my example personally, there is absolutely no reason you must go into debt if you make more than me. Should your income be cut in half, and you have to survive on payday loan, something does not add up. It is super important to slash your expenses anywhere you can.

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