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Moving from two incomes to a single income household can be a strain for any household. Fortunately, there are steps you can take to make this transition a smoother one, whether your move to a single income is one that you chose or one that was forced upon you.

Build an Emergency Fund

John Bush, investment advisor for Schwallier Wealth Management in Ada, Mich., says that households transitioning to single-income living need an emergency fund.

Bush recommends that this fund contains at least six months of daily living expenses. This way, if an emergency pops up – and they almost always do – single-income households can pay for these unexpected expenses without resorting to using their credit cards.

An emergency fund can also protect single-income households in case of a job loss or reduction in working hours, Bush says.

“Typically, having three to six months of expenses is the suggestion, but the financial moat is thinner when there is only one income source,” Bush says. “One job loss and you will have no income. Some may be OK with less than this, but cautious couples would be well-served by funding the account with a full six months of expenses.”

Set a Budget — and Don’t Break It

When you’re living on one income, you have less financial wiggle room. Because of this, setting a household budget and sticking to it is critical.

Your budget should include how much money comes into your household each month and how much flows out of it, too. Your budget needs to account for both fixed expenses, such as rent or mortgage payments, and those that fluctuate each month, such as the money you spend on groceries, dining out and entertainment.

Once you’ve created your budget, you can determine how much you can afford to spend each month.

Mark Aselstine, founder of Uncorked Ventures, a wine-of-the-month and gift basket business just outside San Francisco, says that budgets really are the key to making the transition to a single-income family work.

“The one thing we’ve always done that seems to make it work well, or well enough, is to set a budget and legitimately stick to it,” Aselstine says. “Things like ordering a pizza on a whim after soccer practice tend to go out the window as we try our best to plan our expenses from A to Z at the beginning of the month and also from week to week.”

Review Your Debt, and Make a Plan for Paying It Off

Jeanne Kelly, a credit coach based in Rhinebeck, New York, says that couples often fail to address their debt before transitioning to a single-income household.

This is a mistake. It’s important to have as little debt as possible before becoming a single-income household. It will likely be far more difficult to pay down that debt when you no longer have two incomes on which to rely.

Kelly recommends that couples order their free credit reports before making this move. These reports will tell them how much debt they’re facing. Couples can then have honest conversations about this debt and how to pay it off before transitioning to a single income.

“Oftentimes I have heard from someone who did not realize a spouse had so much credit card debt or a student loan balance,” Kelly says. “It’s healthy to review your credit reports together at least once a year and make this a habit.”

Build Your Business

Moving to a single-income household can be especially stressful if the income you’re relying on is on a freelance basis, says J.R. Duren, personal finance analyst at consumer reviews website HighYa.com.

If you’re a freelancer, you may need to make sure that you have several anchor clients in place before you move to a single-income home. What are anchor clients? These are the clients that you can count on to provide you with steady work and income each month.

“One of the most stressful things about having a single income as a freelancer is the swings in income,” Duren says. “The more sound the payment, the more sound the mind and the soul.”

Save Your Raises

Christine Maxwell, who lives in Colorado Springs, and owns the blog HerMoneyMoves.com, knows all about living on one income. Maxwell is married to a member of the U.S. Army. It’s not unusual for military families to move every two to three years. It’s often challenging for military spouses to find stable employment.

That’s why Maxwell recommends that the readers of her blog live on the income of only the service member, whose job is more stable.

Her favorite tip for living on only one income? When you do get a raise, save or invest that money. It can be tempting to spend more each month once you’re earning more. But doing so means you’ll never boost the savings that you need to build wealth, Maxwell says.

“Don’t go out and spend your raises on new vehicles, expensive vacations or on building or buying bigger homes,” Maxwell says. “When a family is able to avoid lifestyle creep while receiving bonuses and pay raises, it financially prepares them to take on life changes in stride, whether it’s moving from a double to single income by choice or by force.”

Change Your Lifestyle

Chad Rixse, co-founder of Seattle-based financial advisor Millennial Wealth, says that couples will need to make changes to their lifestyle if they plan on moving to a single income.

This could mean dining out less, taking fewer vacations and skipping the movies, all of which might be a challenge.

“Most people get used to living a certain lifestyle,” Rixse says. “Adjusting down from that can be difficult to accomplish. The transition can mean completely rethinking how we go about our daily lives, and that’s not easy for most people.”

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