couple and their children hanging out in the kitchen, while looking at financials on a laptop
Personal Finance

Can a family get by on just one salary?

Here are five things to consider before taking the plunge

couple and their children hanging out in the kitchen, while looking at financials on a laptop“Draw up a list of all your expenses, for at least two months,” suggests CPA Kathy Lempert. “Once that’s done, you have to question everything and not hesitate to change your habits.” (Getty Images/kate_sept2004)

Can a family live comfortably on a single salary? The decision to do so is not an easy one to implement, but it’s not impossible either, especially if it’s temporary, such as for a sabbatical or parental leave. 

Isabelle Thibeault, a personal financial adviser at ACEF, a family economics cooperative in Montreal’s South-West district, says there are five things to consider before setting out on this adventure.


“Start by doing a self-awareness exercise and figuring out what really matters to you,” says Thibeault. “Our consumerist society promotes certain standards: owning a home, having a new car, travelling the globe. Some people feel deprived if they don’t adhere to these values.”

But there is no “good” or “bad” spending, she adds. We just have to know which lifestyle—and what price tag—works for us.

“Our relationship with money is fraught with emotion,” she says. “For some of us, it’s hard to admit that our choices—even those that are thrust upon us—are not always the best. I see it all the time: I advise people who spend over $4,000 a month on housing and transportation. And yet, being in debt means sacrificing your freedom of choice.”


Once the soul-searching is done, “draw up a list of all your expenses, for at least two months, taking seasonality into account so you don’t forget, say, snow-clearing costs,” says Kathy Lempert, a CPA with a strategic and business advisory services consulting practice, who also volunteers as a workshop facilitator in CPA Canada’s Financial Literacy program.

“Once that’s done, you have to question everything and not hesitate to change your habits,” she says. “For example, it’s very likely you’re not getting the best deals if you always shop at the same grocery store. Same thing for subscriptions and other services: telephone, cable, internet, gym, insurance, banking, et cetera.”

The idea is not so much to play one supplier against another, but to ask yourself whether every expenditure is justified. As Pierre-Yves McSween explains in his book Do You Really Need It?, it’s far easier to cut back on expenses than to increase your income.


Some expenditures make all the difference. “Does the family really need a car, let alone two? Could car sharing or a bike be enough?” asks Lempert. Fair questions, considering that Canadians spend about 20 per cent of their net income on car ownership.

It’s also important to consider the difference between variable and fixed expenses, Thibeault adds. “Having to get around doesn’t mean you need a car. Instead, you could have a transportation budget—for car rentals and taxis—that can be reallocated if you run into a problem, which is impossible to do with car payments spread over seven or eight years.”

Another topic that has a lot of people talking is housing. Although buying a home is a lifetime goal for many Canadians, it’s also one of their biggest financial mistakes, says Lempert. “If you add up taxes, mortgage interest fees and renovation costs, homeownership is much more costly than some people think. People need to be realistic and honest, and ask themselves how much buying a home will impact their finances.”

It’s an especially timely question because in some cities home ownership is a real challenge, if not an outright gamble—since, contrary to popular belief, home values can fall. 

Thibeault agrees: “Some people still equate being a renter with lacking ambition. But if you’re disciplined, you can invest the difference and earn a profit, especially since with a house, you need a bigger emergency fund.”


It’s now time to test the model and set money aside. “For a year, a couple could live on one salary and save the equivalent of the second,” Thibeault suggests. “In addition to creating an emergency fund, this would let them see whether their goals are realistic and achievable, because a period of adjustment is unavoidable.”

Of course, with both parents working, there may also be expenses during that year that will then disappear, such as transportation or daycare, but you just have to note these in your budget to determine what they add up to annually.

With the right budget tools, you will see how you will make out. “There’s no point in pretending you will totally give up restaurants or travel if those things really matter to you,” Thibeault insists. “It’s important to make choices that suit you without making you miserable, and then put numbers on those choices. Again, it’s not just about money: it’s also about values. Look at where you went off budget and ask yourself, ‘What does this say about us?’”


These same questions will apply in another key period of life: retirement.

“You have to picture it from the beginning and do as much as possible in the test year, asking yourself, ‘What kind of retirement do we want? How can we manage?’” Thibeault says. “Planning 25 years of retirement on a $50,000 a year income is a huge challenge, so just imagine what it’s like for two people living on a single salary.”

Also, “if just one member of the couple is working, what benefits will the other receive?” she asks. “And who will get the assets in the event of separation, if they were all paid for by the person who is working? There’s a legal framework for married couples, but for those who aren’t, a notarized agreement is a must.” 


Perform a financial health check and get the family involved in budgeting. Try an app that’ll help keep track of your personal finances. Look for low-cost vacations that you can save up for. And if you’re planning for a baby, learn about the inevitable expenses when raising kids.