How to handle personal finances for single income households

Photo by Maxim Tolchinskiy on Unsplash

Single income households are a somewhat common, but less likely occurrence today. When people think of single income households they either think of a single earner struggling to make ends meet. Or, they think about someone who is extremely wealthy and is covering all the expenses of the household. Few talk about the in between, whether its from job loss or by choice. Either way, the core concepts of personal finance don’t change, you still need to save more than you spend then grow the money you have saved. But single income households face some different challenges. So lets look at 3 unique challenges that a single income household is likely to face.

1. Greater need of an emergency fund

It is vital that you have an emergency fund that can sustain at least 1 year of living expenses. Generally having an emergency fund is always a good idea as it helps protect you in rough times. For single income households it is even more important. It is challenging for the other person to help with earnings because they have likely not been working for awhile, the pickings for jobs are slimmer. Another reason you need a larger emergency fund is that as the sole income earner you are likely supplying other benefits such as insurance. You should always be prepared for an emergency, because hiring also tends to be unpredictable and it…