Dual to single income households: Surviving on the bare minimum
12 July 2018 FINANCE
By: Natasha Archary
With more families moving from dual income to single income households, it seems like budgeting is the new favourite past-time for South Africans lately. Resilient though we are, there’s only so many wise-cracks we can take before we have to admit that things are honestly dire in the country.
Previously, we touched on freedom from food prices and just how drastically basic food prices have risen in recent years. We know what this means for the 25.2% of people in the country who are living below the poverty line. Can you imagine living on R531 per month?
In light of recent hikes in South Africa and the never-ending cycle of everything increasing but your salary, what does this mean for single income households? What does this mean for a once dual-income family who now has to survive on a single income? Retrenchments are a real thing but there are many reasons for family structures changing and switching from dual to single income.
Divorce, death of a breadwinner, a partner deciding to go back to school or stay home with the baby, these are very real scenarios that could be at play and no matter the reason, you need to ask, is it possible to survive on the bare minimum?
This week on Kaya Uncaptured, Kgomotso, Ndumiso and the team spoke about the side hustles that help get them through the month. The consensus from the conversation was that, surprise, surprise, South Africans cannot manage on their monthly salaries alone. Most of the responses received were from people struggling to make ends meet and the side hustles offered some respite.
So, is it practical to move from a dual to a single income household? It may not be practical but if push comes to shove and you have no choice, it is possible.
From dual to single income
Save for a rainy day
South Africans aren’t known for our wise financial decisions, yes it’s a generalisation and one that isn’t based on opinion. In a country where technology isn’t embraced as readily as the rest of the world, many don’t even trust internet banking or banking apps yet. Policies and funds are still a luxury for the middle to upper middle-class in the country. With the 1% of dollar millionaires in the country still untouchable. It’s important to put aside a percentage of your salary towards the uncertain future. Retirement funds, or a joint saving account in the event of an unfortunate circumstance, your savings should not be compromised.
You’re already on a budget you say? We feel you. How much more do you cut back you ask? If you don’t need it, you shouldn’t be spending on it. Period. All the music concerts, kiddies theatre productions, date nights and dinners are nice to haves but you’ll need to cut back. Cook more dinners at home, instead of getting takeout, turn a deaf ear on friends who insist you buy them a round. Whatever it takes to cut your budget in half, you do if you are to survive on a single income.
The biggest financial pullers are your rental or bond repayments, food and transport. You’ll need to be mobile to get to work and back and it may not be wise to consider selling your car. But consider public transport a few times a week, to curb back on fuel spend, or carpool, which will also save you on wear and tear on your ride. If you’re a home owner, it may be time to switch to pre-paid electricity and water to curb your usage and monitor your lavish ways. With food, buy in bulk and save big. This way you won’t need to go shopping for food every month and you’ll learn how to reduce your wastage.
A lower income household means that you fall into a new tax bracket. You will need to speak to a financial advisor to discuss how this will affect your annual tax rebates. A financial advisor will also be able to assist you with savings plans and education trust funds which should be an option if you have children to consider.
Side hustle that hustle
With everyone and their moms having a side hustle today, get yourself one that won’t require over-exerting yourself. Find a strength or passion project that pays and dedicate a few hours a day to that, outside your regular nine to five. We shared a few tips on side hustles previously.
No it’s not going to be an easy transition, and it may seem impossible at times but as long as you’re consistent in your spend habits, it can be done. It may seem exhausting and cutting back is not an exact science but we’re all doing exactly that these days. Side hustling and restricting the purse strings.