If you are a single parent you are already well aware of how challenging it is to take care of yourself and your kids. You are solely accountable for the financial stability of your family. That includes figuring out and managing finances while juggling the other demands of parenting.
According to the 2020 census, nearly 19 million children in the United States are living in single-parent households. If you’re a single parent, it can feel like the financial challenges that come with raising a child by yourself are too much to handle.
Figuring out how to manage your finances and budget money may take some time but it doesn’t have to turn into a hassle. Below are seven tips on how to succeed with your money as a single parent.
Know What you Owe
Go through all of your monthly bills, go through them, and try your best to pay them all. If you find some bills that are coming due but can’t be paid on time, make sure you notify the service providers and negotiate these payments.
Repay Current Debt
Another important step toward the financial well-being of your household is repaying existing debt. Debt management is paramount for a single parent wanting to achieve financial freedom. Create a list of all your current debts including student loans, the mortgage, personal loans, etc.
You can follow a debt management strategy to help you knock down the amount you owe. Some of the most popular methods of paying off your debt are debt snowball and debt avalanche
Create a Monthly Budget
Creating a budget is an essential part of money management for a single parent. Once you understand what you owe and have a strict plan on how to repay existing debt and improve the financial stability of your family, you need to make other adjustments to keep up with this plan.
Writing down when every bill is due and crossing off days helps you visualize when you have to make your next payments. There’s no right or wrong way to stay organized—just as long as you’re using the best method that works for you.
Protect Yourself and Your Children
Many single moms do not have coverage from life insurance. But life insurance is an affordable way to ensure your family will be protected financially in the event of your death. You can take out life insurance on a term life basis where your cover will be in place for a set period, for example, 10-20 years. Alternatively, you can arrange whole life insurance lasting for your lifetime—this is usually more expensive.
Save Up an Emergency Fund
Keep a minimum of three months of living expenses on hand. We all experience a large, unplanned expense at some point. You could experience a job loss, medical emergency, or sudden major expense like a car repair. It can seem like a daunting task to build up your emergency fund but remember, any amount of money you can save helps. You should aim to build it up over time to help create a cushion for when you need it.
At the same time, get serious about your retirement planning. Take advantage of any investment benefits offered by your employer, and seek professional advice about investment strategies that can help you reach your goals.
Keep your Expenses Low
One of the ways you can stretch your money further as a single parent is by keeping your expenses low. Look for ways to save on your money subscription plans first. For instance, you may be able to save money on your phone bill by switching to another provider. Instead of paying for cable, open a Netflix account.
And always be on the lookout for ways to save on your daily expenses. For instance, you can make coffee at home instead of going to Starbucks every week. And activities and outings can cost a lot of money, so look for free things you can do with your kids.
Change your Financial Mindset
One of the most important things you can do to change your financial life as a single parent is to change your financial mind. How and what you think and believe establishes what happens in your finances.
There’s always going to be a steep mountain you have to climb as a single parent, but using the tips above and having patience will help you through even the toughest situations. With the tips above and a strategy in place, you’ll be well on your way to an excellent financial situation for both you and your child.
You will notice the difference and find it faster to save money, reach your financial goals, and build wealth. Furthermore, you will serve as an example for your children and teach them about budgeting and taking control of personal funds.