We are currently enjoying life as DINKs. If you’re not familiar with the acronym, DINK stands for ‘Dual Income, No Kids‘. DINKs have a unique opportunity in the pursuit of financial independence, side hustles, and all sorts of other things. However, even if you’re not strictly a DINK, you can still benefit a lot from having a dual-income household living off one income.
One of the biggest benefits to being a two-income household only living off one is that you can bank an entire income. Kristin and I are currently doing this. We live off the higher of our two incomes currently, but we’re still able to bank a ton of the money that’s coming in each month. As we save more money toward our goals, in retirement accounts, etc. we push up the date of our retirement.
Banking an entire income is a great maneuver to really supercharge your savings and hit goals more quickly. We do this by having one income go straight into a separate account automatically. We see the money, but it’s totally hands-off and never hits our checking account.
Avoid Lifestyle Inflation
Since we don’t “use” one income, we force ourselves to be mindful of the money we do have coming in. This means budgeting effectively and avoiding lifestyle inflation. Sure, we could afford more things – a fancy car, perhaps – but we definitely don’t need it, and doing so would hinder our other goals.
Avoiding lifestyle inflation is an important aspect of early retirement – which we’re pursuing. We can still enjoy some treats and don’t deprive ourselves to the point of being miserable. Avoiding lifestyle inflation, to us, is not about deprivation. It’s about making conscious decisions on how and when we spend the money we’ve earned, and understanding the impacts it has on our various goals.
Do you know what sucks? One person losing their job. Do you know what sucks even more? One person losing their job when you rely on the income of two people. It’s simple – if you live off one income, you can flex if one person loses their job. Even if a more substantial income is lost, having at least some money coming in that isn’t 100% needed makes the whole process sting a little less.
This may mean a few uncomfortable weeks or months. Perhaps you need to change up your automated savings for a little while, too. That’s really not that big of a deal; life will always deal setbacks to your plans at some point. By living within your means and only needing a single income to survive, though, you can hopefully tread water instead of going backward in the event of a loss of income.
Jump-Start Side Hustles
Get your side hustle on! A great opportunity afforded by living off a single income is the ability to have one person focus on a side hustle if that’s what you choose. Deciding what your goals are as a couple is important.
If one person wants to focus on building a business or starting their own web site, it’d be immensely helpful to be able to focus 100% on that. If you need to have two incomes to support your lifestyle, guess what? Not going to happen. Living off one income, though, gives you the opportunity to focus on other goals that may not otherwise be possible.
Perhaps you’re not the side hustle type. If you’d rather help someone else’s side-hustle, taking up work at a start-up is a lot less risky when you don’t need the income to survive.
Ultimately, what this all boils down to is flexibility. If you’re able to live off a single income as a couple, or have two incomes as a single person but still just live off one, the opportunities afforded to you are immense.
You’ll have more flexibility to pursue what you really want to. For some that may mean continuing to work traditional jobs and just saving and investing, but for many it may mean going down the side hustle route, or something else completely.
Building that flexibility in your life is what FIRE (Financial Independence, Retire Early) is all about….but multi-income households don’t need to always wait to hit some magic net worth number to get there.
If you’re a two(+)-income household, do you try to live off a single income? Any other tips for folks who have this luxury?