Financial Advice Blog

How to survive on one income when having a baby

With the cost of living constantly rising, many families feel the need for both partners to work. So how can you survive on one income while on maternity leave?

The idea of living off one income is almost foreign these days. Gone are the days where it was the norm for a mother to stay at home for a long period of time. With the cost of living constantly rising, many families feel the need for both parents or partners to work, so how do you survive on one income while on maternity leave?

Plan ahead

If you know you are going to have a baby, start planning before you even fall pregnant. Or if the pregnancy was a surprise, get a plan straight away. Speak with a financial advisor about your options and your change in circumstances.

Kim, of New Mumma Kim, got proactive and planned ahead.

“We started saving any money we had leftover each month since finding out we’re pregnant. Thankfully, we cleared all our debts during our last pregnancy and only have the mortgage now, which we manage with on one wage. To ease the financial burden week to week we paid our large bills such as council rates for the whole year with our tax payment. With the paid parental leave I plan to prepay our sson’sschool fees to cut ongoing costs next year too.”

Check your maternity leave entitlements at your workplace. You might need to work a certain period of time to be eligible or there might be limited options. Some workplaces put restrictions on what you can and can’t do on maternity leave (e.g. you can’t run a business or other income producing activities) so take that into account.

Look into government options you might be eligible for and include these in your calculations. With the above done, you can then start saving now to have money set aside to enable you to stay home for a period of time.

Stick to a budget

It’s easy to spend thousands on all of the items you think you need for your precious bundle of joy. The reality is, you don’t need that much. Work out what are essentials for you, set a budget then stick to it. You can always pick up more items later if you find you really need them.

If you’re organised, you can pick up many items on sale.  There are also many second hand bargains on Gumtree and Facebook mum’s groups.  Remember babies grow so quickly and you may only get a couple of wears out of an item of clothing.

Be open to offers from people to buy things for your baby too. Baby showers are a wonderful celebration and can provide a lot of what you need. Grandparents often want to buy something special such as the cot or pram, and other friends or family might be done with their families and have items to give you.

It may help to keep in mind that the more you can save on these baby set up expenses, the more time you may be able to afford on maternity leave.

Practice living off one income

Before you even fall pregnant (or in the early stages of your pregnancy), practice living off one income. If you can do it now it will provide you with the reassurance you can do it when the baby is here too. Try it and set aside one wage to invest or save (speak with a financial professional for advice on what to do with the money).

Living on one wage might mean cutting back on the amount of coffees, brunches or Uber Eats you order, planning your grocery shopping better, ensuring you switch off household items that you aren’t using to reduce your electricity bill and evaluating all your spending. It can be the difference between surviving on one income during maternity leave or having to go back to work early.

Do what works for you

We have spoken about maternity leave here, but really, do what works for you. Some families have mum stay home for a while, other have dad. In some families the mother wants to go back to work sooner, in others she wants to stay home for as long as possible.

Create a plan, but be flexible. Your feelings or circumstances may change after your baby is born and that’s ok. Do what’s right for you, whether it’s six weeks off, six months off or even three years. By following the tips above and working with you financial advisor to create a plan, you can help put yourself in a position to choose what is best for your family.

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