Many single parents face financial hardship. Whether they have been left by a disappearing partner, widowed, or are have raised their child alone since birth, it can be incredibly tough with regards to money. There will be times when the costs of life – including child care – seem impossible to meet. However, with some savvy planning and creative thinking, it is possible for single parents not just to survive, but thrive. Here are a few tips for anyone going solo on how to regain and maintain control of your finances.
Work out a budget
As with anything to do with finances, the first step into getting – and staying – out of a money hole is to work out what you have. It’s even more important to do this as a single parent because as you know, every cent counts. When you are trying to get by on one income, you will be stretched at every turn, and it will be impossible to stay on top of your money if you don’t know what you are due, or what you are spending. There are plenty of online tools out there that can help you create a budget, so take a look around and do it sooner rather than later.
Reduce your mortgage/rental payments
One of the biggest expenditures in any family is the cost of mortgage payments or rent. It’s hundreds – possibly thousands – of dollars leaving your hands on a monthly basis, and it may not be sustainable in the long-term. Downsizing is an option, of course, but there are also ways to stay if you find the thought of moving out of your family home troubling. You could look for a single mom roommate program in your area and house share, for example, splitting the costs two ways. You could rent out space to lodgers, too.
Make sure you have a savings plan
You still need to put money away when you are a single parent. Yes, it can be tough, but it is necessary. We’ll go through some ideas of cutting household spending costs in a moment, but first, make sure you have a couple of savings accounts at least: one for an emergency fund and one for your children. Your emergency savings should have at least six months of living expenses in there at any given time, which should be enough to see you through any financial crisis. And savings for your kids can help you pay for anything they will need in the future, whether it’s to do with their education or out of school classes.
Free up money
There are thousands of ways to save money around the home. Switching your grocery brands from famous products to generic alternatives can cut hundreds of bucks from your annual shopping bill. Ditching cable TV and getting Netflix or Hulu keeps your kids entertained, without the price tag. And making sure your home is well insulated and energy efficient can save you a four-figure sum over the course of a single year.
Yes, being a single parent is a challenge, but when it comes to your finances, there are some great solutions. Any tips to add?