Deciding whether a household can live on one income starts with an honest look at what the second income actually adds once tax, childcare and the costs of working come off. This guide works through that math, then shows a sample single-income budget and the trade-offs that make one income stretch. It is part of our budgeting guides; for how couples divide money and accounts day to day, see our guide to managing money as a couple.
Can you afford to live on one income?
The real math: a second income vs staying home
Factor
Working (2nd spouse)
Staying home
Second gross income
$45,000
$0
Income tax (incl. CPP/EI)
-$10,000
$0
Childcare (2 kids)
-$12,000 to -$24,000
$0
Commuting
-$2,400 to -$6,000
$0
Work clothes/lunches
-$1,800 to -$3,600
$0
Convenience spending (takeout, cleaning)
-$2,400 to -$4,800
$0
Net financial benefit of working
-$3,400 to $16,400
$0
In this example, the second income nets anywhere from a small loss to about $16,400 a year, depending mostly on childcare and commuting. Childcare costs in particular depend on the province and on whether a regulated, subsidized space is available. The table leaves out one more effect: the Canada Child Benefit is based on family net income, so a second income reduces it (see below). If the non-financial value of staying home (time with children, less stress, schedule flexibility) is worth more to the family than the net figure, one income can make financial sense.
One-income budget: family of four
Income of $70,000 (gross)
Item
Monthly
Annual
Gross income
$5,833
$70,000
Income tax + CPP + EI
-$1,250
-$15,000
Net income
$4,583
$55,000
Canada Child Benefit (2 children, estimate)
+$950
+$11,400
GST/HST credit (estimate)
+$55
+$660
Total available
$5,588
$67,060
Budget breakdown
Category
Monthly
% of available
Housing (mortgage/rent)
$1,500
27%
Groceries
$700
13%
Transportation (1 car)
$450
8%
Utilities
$250
4%
Insurance (home + auto)
$250
4%
Children’s activities
$150
3%
Clothing
$100
2%
Personal/household
$150
3%
Phone + internet
$120
2%
Entertainment
$100
2%
Savings (TFSA/RRSP)
$500
9%
Emergency fund
$200
4%
Miscellaneous/buffer
$118
2%
Total
$4,588
82%
Surplus
$1,000
18%
The emergency fund line matters more on one income, since there is no second paycheque to fall back on; our guide on how big an emergency fund should be covers sizing it. When a single income leaves nothing over month after month, the plan in our guide to living paycheque to paycheque is a place to start.
Government benefits and tax advantages
Most income-tested benefits are calculated on family net income, so for a family living on one income the amounts are based on that one income rather than two. The Canada Child Benefit is usually the largest; our page on CCB amounts by family income shows what a family receives at each income level and number of children. The GST/HST credit and the child benefits several provinces pay, including Ontario, BC, Alberta and Quebec, are also income-tested.
Calculated on family net income, so it reflects one income rather than two
GST/HST credit
Also based on family net income
Spousal RRSP contributions
Build retirement savings in the at-home spouse’s name
One car instead of two
Removes a second car payment, insurance and fuel
No childcare expenses
Childcare fees fall away when a parent is at home
A spousal RRSP lets the working spouse contribute to an RRSP in the at-home spouse’s name and take the deduction, which can even out the couple’s retirement income; our guide to the spousal RRSP covers the contribution rules and the withdrawal attribution rule.
Cost-cutting strategies for one-income families
Housing (biggest impact)
Strategy
Monthly savings
Buy a smaller home / townhouse
$300-$800
Live in a lower-cost city
$500-$1,500
Refinance to lower rate
$100-$300
Get a roommate/basement tenant
$600-$1,200
Pay down the mortgage faster
Interest saved over the life of the mortgage
Transportation
Strategy
Monthly savings
Be a one-car family
$400-$700
Buy used instead of new
$200-$400
Drive a fuel-efficient vehicle
$50-$150
Use transit for commute
$200-$400
Food
Strategy
Monthly savings
Meal planning and batch cooking
$100-$200
Buy store brand
$40-$80
Shop sales and use Flipp/coupons
$50-$100
Grow a basic vegetable garden
$30-$60 (seasonal)
Reduce food waste
$50-$100
Cook from scratch (no prepared meals)
$100-$200
Children’s costs
Strategy
Monthly savings
Buy/sell kids’ clothes secondhand
$30-$60
Use library for books and activities
$20-$40
Choose free community programs
$50-$200
Limit paid extracurriculars to 1-2
$50-$200
Income thresholds by city for one income
City
Minimum one income (family of 4)
Comfortable one income
Toronto
$80,000-$100,000
$100,000-$130,000
Vancouver
$80,000-$100,000
$100,000-$130,000
Ottawa
$65,000-$80,000
$80,000-$100,000
Calgary
$65,000-$80,000
$80,000-$100,000
Edmonton
$60,000-$75,000
$75,000-$95,000
Montreal
$55,000-$70,000
$70,000-$90,000
Winnipeg
$55,000-$65,000
$65,000-$85,000
Halifax
$55,000-$65,000
$65,000-$85,000
Saskatoon
$55,000-$65,000
$65,000-$85,000
London ON
$55,000-$65,000
$65,000-$80,000
These assume a paid-off or affordable mortgage or rent. Higher housing costs require a higher income.
The stay-at-home spouse’s financial checklist
Item
Why it matters
☐ Own TFSA
Personal savings in your own name, growing tax-free