One day, you're a two-income family. The next, one of those incomes is gone. Or you are planning on making a financial change in the future. What do you do? (For related reading, also take a look at 3 Alternative Budgeting Styles: Which One Suits You?)

IN PICTURES: 5 "New" Rules For Safe Investing

Whether one of you chooses to leave your job or the reason for departure is out of your control, having a plan to deal with sudden loss of income can be the key to financial - and emotional - survival. Here are some basic steps to cope with the change.

Take a Good Hard Look at Spending
Do you really need the new car every year and the expensive lease payment that comes with it? Or can you "make do" with a more economical model without all the bells and whistles? In addition to saving on monthly payments, making a change might also reduce your auto insurance premiums. It's worth checking into. How about entertaining? Having dinner out two or three times a week at a local restaurant can run a couple, on average, at least $50 a shot - more with drinks and generous gratuity. Even grabbing coffee and a snack on the run can add up, especially if your craving for chocolate caramel lattes becomes part of your everyday routine. (For more on tipping etiquette, see When To Tip? And How Much?)

Likewise, examine your shopping habits, for clothing, groceries, household items etc. Making a list of what's necessary and what's not might help you rethink how and why you spend your money. Remember: While cutting down on a few indulgences won't replace the loss of a paycheck, it could be the start of gaining more self-control when it comes to your spending habits.

The Bare Necessities
Shifting from two incomes to one doesn't necessarily mean ceasing and desisting all spending, but it does require careful thought and planning - and creating a budget. Then you can get down to the business of cutting back. The first items that come to mind when doing one's budget are necessities such as housing and groceries. Consider refinancing your mortgage, if you're able to secure a low enough rate to make it worth your while. This may cost a little up front in fees, but can save you a bundle in the long run.

Take another look at your weekly grocery shopping list. Are you paying attention to weekly sales and using coupons? Buying in bulk when available? Don't forget about other equally important expenses, like health coverage and other insurances such as life, fire and homeowners or rental policies.

Re-evaluate monthly expenses, such as phone and cable costs, subscriptions and organization dues and credit card balances. Can you trim a little here and there, or eliminate entirely? Sometimes all it takes is a call to the company to renegotiate your credit card interest rate or cable contract.

IN PICTURES: 7 Forehead-Slapping Stock Blunders

Forget the Crash Diet
Okay, so you may have to forego that three-week cruise to the exotic ports of call. But that doesn't mean you have to stay home, either. Lots of families and couples enjoy affordable vacations, thanks to careful planning. Look for off-season rates or last-minute deals, or opt for day trips where you can easily take mass transportation.

Don't feel like cooking? Order take out. Want to see a movie? Try a matinée, which is usually cheaper (and can make for a nice break in the day). Denying yourself of all spending is like crash dieting - you may lose the weight quickly, but you haven't lost the craving or learned how to eat sensibly enough to keep the weight off. It's no different with finances. Avoid withdrawal symptoms by easing away slowly, and thus, learning to live leaner at the same time.

Create an Emergency Reserve
Disasters happen, and they don't care that you now have one income instead of two. So you have to stay prepared. Easy? No way. Possible? Of course.

If you made regular contributions, say, to your IRA or piggy bank fund, figure those into your budget plan. You may have to lessen the amount you're saving, but try to stash away something as often as possible. After you've reworked your budget and expenses, if you can live with $20 a week less for one year, you will have saved about $1,000. That can pay for an unexpected emergency like a minor furnace repair or some dental work.

And if you're fortunate enough to have no such emergency, you'll have some extra cash for something "fun" or, at the very least, an excellent start towards a new frugal you.

The Bottom Line
Having to go from two incomes to one is no task for the weak-willed. But it can be done, and you will be surprised how resilient you can be. Don't worry about keeping up with the Joneses. Your situation is unique to you, and if that means having to tell your friends you can't do dinner or a show, then so be it. If they're true friends, they'll understand.Stay on the same page as your partner. Serious budgeting and fiscal revamping only works when the two of you agree, or at least agree to compromise.

Remember, a financial change may only be temporary. If you can manage until your situation changes, bravo. If the change is decidedly permanent, you will have a head start. (For additional reading, also check out The Beauty Of Budgeting.)

Related Articles
  1. Economics

    What is a Complement?

    A good or service that’s used in conjunction with another good or service is a complement.
  2. Investing News

    Chipotle Served with Criminal Probe

    Chipotle's beat muted expectations and got a clear bill from the CDC, but it now appears that an investigation into its E.coli breakout has expanded.
  3. Stock Analysis

    From Shampoo to Soup, Unilever Has it Covered (UL)

    Open your fridge, your pantry, your bathroom cabinet and you'll find the Unilever logo. Here's how the company got so enormous.
  4. Stock Analysis

    JNJ vs. PG: Which is the Better Bet Right Now?

    These two stocks are long-term powerhouses, but one has the edge over the other right now.
  5. Stock Analysis

    The Top 5 Small Cap Restaurant Stocks for 2016 (BLMN,DENN)

    Learn about the market conditions that could help continue pushing restaurant stocks higher in 2016 and the five small-cap restaurants that are worth a look.
  6. Economics

    What is the American Dream in 2016?

    The American Dream is still alive and well, but it looks very different than it used to.
  7. Economics

    Why Commodities Aren't to Blame for Market Malaise

    Commodities are taking the brunt of the blame for poor investment performance. Are they the real villain?
  8. Economics

    Has IKEA Reached 'Peak Curtains?'

    An IKEA executive made a comment that would have rankled investors (were IKEA not privately held). Here's what he (probably) really meant.
  9. Stock Analysis

    Has Chipotle Hit Bottom? (CMG)

    Chipotle has suffered from a public relations nightmare. Can its stock recover?
  10. Stock Analysis

    Should You Steer Clear of GoPro (GPRO)?

    Is the GoPro growth story over or is there still gas in the tank?
  1. Are UTMA accounts escheatable?

    Like most financial assets held by institutions such as banks and investment firms, UTMA accounts can be escheated by state ... Read Full Answer >>
  2. Marginal propensity to Consume (MPC) Vs. Save (MPS)

    Historically, because people in the United States have shown a higher propensity to consume, this is likely the more important ... Read Full Answer >>
  3. Is Japan an emerging market economy?

    Japan is not an emerging market economy. Emerging market economies are characterized by low per capita incomes, poor infrastructure ... Read Full Answer >>
  4. Are Social Security payments included in the US GDP calculation?

    Social Security payments are not included in the U.S. definition of the gross domestic product (GDP). Transfer Payments For ... Read Full Answer >>
  5. What economic indicators are important to consider when investing in the retail sector?

    The unemployment rate and Consumer Confidence Index (CCI) rank as two of the most important economic indicators to consider ... Read Full Answer >>
  6. How do changes in interest rates affect the spending habits in the economy?

    Changes in interest rates can have different effects on consumer spending habits depending on a number of factors, including ... Read Full Answer >>
Hot Definitions
  1. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  2. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  3. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
  4. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. Included in earnings reports are items such as net ...
  5. Dark Pool Liquidity

    The trading volume created by institutional orders that are unavailable to the public. The bulk of dark pool liquidity is ...
Trading Center