Living on a single income source is extremely challenging. Sometimes life throws you in at the deep end that you figure out the ways to keep up with your emotional as well as financial instability. Being reliant on a single income source to keep the wolf from the door successfully does not seem possible whereas prices are touching the sky. However, the largest proportion of the population in the UK is between the age group of 40 and 44 relying on a single income source because of parted ways, with 34% single father and 21% single mother.
The family size, children education, health issues and availability of employment also account for the burden on finances. A large proportion of money goes in meeting medical bills and children education that you are left with a small chunk of money for a rainy day. Thankfully, easier availability of loans can help you tide over but it cannot support you in the long run. The amount you borrow is to be repaid along with the interest. If you have been running out of money, you will not be able to reimburse the debt and eventually it takes a toll on your credit score that you end up with loans for CCJ and bad credit. Therefore, you should be careful enough with money management.
Create a budget and stick to it
Budgeting can help you prevent from insolvency. Identify all sources of income your salary, bonuses, government benefits, child support etc to have a clear idea of how much money is flowing in. Make a list of all expenses such as subscriptions, food, travel, rent, utilities, insurance etc to know how much money is going out.
Now target discretionary expenses. Cutting down on optional expenses outright can make harder to stick to your budget. Financial experts recommend that you should divide these expenses on your priority basis. High priority must include those that you want anyhow like your morning coffee. Medium priority expenses target those that you can avoid during tight financial condition like gym subscription and low priority should target those that you can give up easily like magazines subscription.
Now keep tabs on your expenses. jot down every purchase you make during a month and follow this habit for a couple of months to have an idea which category consumes a major proportion of your money. Since starting if you continue to follow this trend, you will be able to keep overspending at bay.
Building an emergency cushion is also an integral part of budgeting. Try to set aside some money for emergency reasons. Financial experts say that you should have at least three months worth cost of living as savings. Despite making all efforts, you are likely to have cash shortfalls. Well, in this situation any loan including a bad credit loan with no guarantor will be easy to manage provided you borrow money from direct lenders like Loan Store as you can use your savings too.
Manage your credit responsibly
Since you do not have multiple income sources, you may need to take out a loan to finance your big expense. A direct lender must look at your credit history to know how responsible you have been with debts. Any default in your credit report may bar you from applying for the loan.
So, the first step should be fixing error in your report. Credit reference agencies sometimes show those defaults on your report that do not belong to you. Get a free copy of your report to dispute errors if any.
Be careful with the use of your credit card. Try to use them only when you do not have money and the buy is urgent. Settle your account as soon as possible, otherwise the APR on the top of the amount continues to add up. If you have been multiple credit cards with outstanding dues, you should switch to 0% balance transfer deals. These deals will help you avoid paying interest provided you settle all of your dues within the interest-free period.
If you have been juggling with multiple loans, you should try to consolidate your loans. However, this option is not suitable for all borrowers.
Increase your income
Having a side gig not only helps you have more money but also helps you finance your unforeseen expenses. Get a part-time job or try to do freelancing if it is not possible for you to get out of home. Apply for government benefits like child support benefits. Figure out how you can pare down the burden of tax deduction. For instance, you can earn income tax credit if your income is sufficiently low.
If you want to survive on only one income source, you should be organised with your spending habit. Create a budget, track your expenses and generate more income sources.