I’m a Financial Advisor: 5 Money Moves To Make if You’ll Be a Single Income Household Soon
Written by
Laura Bogart
Edited by
Kristen Mae
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Scrolling through the news can feel harrowing these days. Headline after headline talks about the waves of layoffs that are hitting good and talented people, and those waves are starting to pound down on your own networks. As you watch members of your own team get washed away, you worry that you could be among the next round of layoffs. Your household, which ran on a double income, could be reduced to only one, sooner rather than later.
Of course, you and your partner are anxious. How could you not be? But there are some money moves you can make now to potentially blunt the financial burden. If anyone would know, it’s Carlos Ruiz, CFP, of Pivot Wealth Advisors. His own family went through this scenario, and after coming out on the other side, he has advice about how to get through it.
1. Create a Survival Budget
If there’s one thing Ruiz advises you and your partner to do, it’s to create a budget that covers the bare essentials.
“You’ve got to figure out the bare essentials. Things like housing, food, transportation. This isn’t your forever budget; it’s the ‘if things get tight, we’re covered’ version,” he said.
2. Boost Your Crash Reserves
While you’re both still working, it’s crucial to save as much as you both possibly can. Ruiz recommends putting between six and nine months’ worth of core expenses in a high-yield savings account. “It’s not the sexiest place to park your money, but liquidity matters when you’re staring down uncertainty,” he said.
3. Test Out Life on One Income
One of the best things Ruiz and his wife did was a test run of life on one income, which helped them sense where the “pressure points” were in their financial planning before the situation became real. While you live on one paycheck, you can bank the rest of your income in the high-yield savings account.
4. Review Your Insurance Plans
You and your partner will also need to sit down and review your insurance plans, including health, life, and disability coverage, particularly if the partner at risk of being laid off holds those benefits.
“Better to know your gaps now than scramble later. COBRA is not always the best option, but it’s the option that most go to by default,” said Ruiz. “The only caveat might be having to change doctors, but if that’s not important to you, there are public plans out there that are more affordable.”
5. Engage in Real Conversations
As you prepare to become a single-income household, it’s time to engage in some real talk as a couple — talks that could actually strengthen your relationship.
“Decide together what you’re willing to cut and what you’re not. It’s different for every couple — some will cut groceries before childcare, others the opposite. What matters is being clear on your values together,” said Ruiz.
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