Do you have a single-income household? Here are five tips from Effie Zahos – money commentator, author and Channel Nine’s Money Editor and the editor of The Australian Women’s Weekly Money Matters magazine – to make the most of your money when there’s only one pay cheque coming in, whatever the reason.
1. Budgeting for single-income households
Track your spending, ditch the fluff, and stick to the 60/20/20 rule – 60% of your income for essentials, 20% for savings, and 20% for fun. You can adjust the weights, but the key is to set up designated money “buckets”.
Inflation may be cooling, but costs like insurance are still biting. A simple switch from the average to the cheapest plans for home, car, health and energy could put nearly $2500 back in your pocket (see below). Revisit subscriptions and cut what’s not necessary. Use grocery apps and cashback sites to help you save.
What swaps could save you*
Home and contents insurance: $957
Car insurance: $958
Health insurance: $219
Electricity: $353
Potential savings: $2487
*From average to lowest/5-star average. Source: Canstar.
Money hack
Compare energy bills at energymadeeasy.gov.au – find your National Metering Identifier (NMI) on your bill, enter it, and discover cheaper plans (NSW, SA, ACT, Qld and Tas). If you’re in other states, use your state’s energy site or comparison sites like Canstar Blue and Compare the Market.
2. Source additional income streams
A single income household doesn’t have to mean just one payment source. Explore side hustles or passive income. Renting your car space could earn you up to $400 per month, says Parkhound. For other options, here’s an estimation of what you could earn on Airtasker per task:
- Queue line up: $168
- Cleaner: $143
- Gardener: $138
- Furniture assembly: $124
Money hack
Turn Saturday sports into a cash grab and collect empty cans. Add them to your home stash and recycle. Depending on where you live, each can could fetch 10 cents. Cash in or swap for vouchers at retailers including Coles, Woolworths, IGA, FoodWorks and BP.
3. Maximise financial assistance for single-income households
Check if you’re eligible for government assistance such as a Family Tax Benefit, Child Care Subsidy, or healthcare concessions. Even small benefits can make a significant difference. If you do receive a government payment and are eligible for a concession card, be sure to tell your bank this, as you could then be eligible for low or no-fee bank accounts.
Money hack
If you’re unsure what you may be eligible for, head to Services Australia and use its “Payment Finder” tool. Payment Finder can help you work out how much money you could get.
4. Loans for single-income households on low incomes
The No Interest Loans Scheme (NILS) offers affordable credit to people on a lower income. Loans are available for essential goods and services – like a fridge or washing machine, car repairs or medical procedures – for up to $2000. Loans of up to $3000 are available for housing-related expenses such as bond or rent-in-advance.
To be eligible for a NILS loan, you need to have a Health Care Card or Pension Card, or earn less than $70,000 annual income (before tax) as a single person or $100,000 annual income (before tax) if you have a partner or children.
Money hack
Improve your money management, and you could get paid up to $500 to save. Saver Plus is a 10-month matched savings program available through a range of community agencies around Australia. Eligibility criteria include: You must be over 18; hold a Health Care Card or Pensioner Concession Card; be receiving an eligible Commonwealth social security benefit, allowance or payment.
5. Ways for single-income households to tap into tax hacks
If you feel like you’re paying more tax just because you’re a one-income household, you probably are. That’s because the tax system tends to favour dual-income households, even if the total household income is the same.
Here’s a comparison:
- Single-income household (one person earning $120,000)
- Family income: $120,000
- Tax Bill: $29,188
- Dual-income household (two people earning $60,000 each)
- Family income: $120,000
- Tax Bill: $19,776
That’s a $9412 tax hit just for earning the same income differently! The culprit? Marginal tax rates.
The first $18,200 of income is tax-free per person, so splitting income between two people means less tax overall. According to tax expert Eric Dickler from EDR Accounting & Business Solutions there are some simple tweaks that could bring in tax savings and help reduce the tax impact (see below).
Three simple tax strategies for single-income households
1. Income splitting
For any non-salary income, such as investments (shares, investment properties, cryptocurrency, bank interest) make sure this is in the name of the lowest income earner in the household (18+), or consider using a Family Trust to hold the investment so you can more evenly distribute the income between multiple family members.
2. Max out tax deductions
Where available and appropriate, claim tax deductions against the single/highest-income earner. These include charity donations, negatively geared properties, and superannuation contributions.
3. Super splitting
Consider splitting pre-tax super from single-income earners to reduce overall tax paid. Making a spouse contribution directly into your spouse’s super could mean you earn a spouse contribution tax offset you can claim against your tax bill for the financial year in which you make the contribution.
Effie Zahos is a money commentator, author and Channel Nine’s Money Editor.
Information is correct at time of writing. Any advice provided is general in nature and does not take your personal circumstances into consideration. Readers should seek their own financial advice.
This article originally appeared in the April 2025 issue of The Australian Women’s Weekly. SUBSCRIBE so you never miss an issue.
