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The workplace has changed significantly over the past three years, and many Americans are rethinking what they want out of their careers. Some are looking to move on to a new employer, while others are planning on taking on a full-time job. According to a survey conducted by Northwestern Mutual in 2022, 21 percent of people said they plan on making major life changes within the next two years, 11% would like to retire early, and 13% want to make their side hustle a full-time job at some point in the future.

 

Regardless of the reason behind your decision to move to a single-income household, it’s important that you and your family are financially prepared. Here are eight financial considerations that will help you make the transition.

 

Invest in an emergency fund

One of the most important factors you should consider when making the transition to a single income is having enough savings to cover unexpected expenses, such as medical bills. This will allow you to maintain a level of financial security that you can rely on. If you’re planning on making the switch to a single income soon, it’s important that you start setting aside a sizeable amount of money for this move.

 

Look at your budget

Before you start working on a single income, you should establish a budget that includes all of your expenses. This will allow you to monitor your spending and savings goals while also taking into account the new take-home pay. It’s also important to note that you’ll likely be able to recoup some of your savings on various expenses, such as childcare and commuting.

 

Check out your insurance coverage

Setting aside a sizeable amount of money is paramount to your success on one income in the long term. You should also consider adding disability or life insurance to your existing insurance coverage.

 

Figure out what you’re going to do with retirement savings

Working full-time can often mean having access to a variety of retirement savings, such as a company match and a traditional retirement plan. If you’re planning on leaving your job, you’ll most likely be unable to make new contributions to your existing retirement accounts. However, if you’re still working and your partner is still earning, you can roll over your old retirement savings into an IRA.

 

Taxes

For the person still working, it’s possible you could alter your W-4 form to reflect the additional money you’re putting into your take-home pay. If you’re also planning on taking a smaller refund this year, it’s important that you increase your withholdings. Before you start working on a single income, you must speak with a tax professional to help you determine the best strategy for your situation.

 

Although moving into the unknown shouldn’t scare you, it’s important to consider the various factors that will affect your financial situation when moving to a single income.