Money Tips for Single Parents
Smart budgeting and financial planning can make it easier to cope with the challenges presented by single parenthood.
Almost 15 percent of U.S. households are single-parent families1 and nearly 80 percent of them (9.6 million households) are headed by single mothers.2 Single parents have a lot of responsibility, and managing a household on one income can be a great hardship. Smart budgeting and financial planning can make it easier to cope with these challenges.
Start with a budget
Living within your means and avoiding debt should be your number-one priority. Start with a concrete budget. List all of your income and your monthly expense and calculate the difference. Then figure out where you can start chipping away at the expense column. What are you paying for that you can do without? Which expenses can you reduce?
On the flipside, look for ways you can increase your income. Can you start a "side hustle” with a company like Uber, Lyft, or Airbnb?3 Can you make some money selling things you have around your home that you no longer need? Any extra money you can find will be a win in the budgeting department.
Always balance your checkbook
Record every transaction you make with your checking account so you're always aware of exactly what your balance is. This will help keep you from spending money that you don't really have and will ensure that you are always aware of exactly how much you have to work with. This may seem like a no-brainer, but believe it or not, as many as 69 percent of people never actually balance their checkbooks, according to Statistic Brain.4
Get joint debts figured out
If you have any shared accounts with your ex-partner, you need to get these separated. Each of you should transfer your share into a new, separate account.
As credit/debt management expert LaToya Irby tells The Spruce, "If you’ve made an agreement with your ex to split the debt payments on accounts that include your name, and your ex misses a payment, it’s going to hurt your credit. If the ex fails to pay all together, you will have the creditors and collectors come after you. Not even a divorce decree can change the terms of a joint credit card agreement. In the credit card issuer’s eyes, you’re just as much responsible for post-divorce accounts as before."5
Collect your child support
Make sure you are getting the child support you need and are entitled to. If your ex isn’t adhering to agreed-upon payments, you need to act quickly. Seek out legal assistance so you can get the money you are owed.
Pay bills before you shop
While it's in a parent's nature to provide for his/her children, and this is often the first priority when payday rolls around, try to resist the urge to go shopping before paying the bills. Of course, if you are in absolute need of food and other essentials, you must prioritize these things, but if you can pay your bills first, you'll leave yourself with less room to burn money on non-essential items and impulse-buys. Considering that stores are intentionally set up to encourage impulse-buying, you may avoid some financial mistakes this way.
Pay your bills on time
Paying your bills first will also help ensure that you're paying your bills on time and avoiding late fees. Late payments can also negatively impact your credit score, which can affect your financial freedom in the future.
Plan your meals ahead of time
Set aside some time each week to plan your meals, and then compose a grocery list based on the exact products you need. Sticking to that list can help you avoid over-buying at the grocery store. Having your meals planned for the week, and having the supplies you need to make the meals, should help you avoid costly trips to the drive-through window.
Always plan for the future
Keep the future in mind, and try to set aside money each month, or better yet, in each paycheck, for savings. Even if you can't save much each time, it can add up to a substantial sum as time goes on. This can be a big help in case of an emergency, but it's also a good idea to set up a long-range financial plan for your kids’ college or your own retirement.
Being a single parent can be difficult for a variety of reasons, and finances are among them. When you're responsible for all of life's bills and expenses on your own, you need to be smart about how you manage your money. Set clear, realistic goals, and hold yourself accountable to them. This will not only help you financially, but will also set a good example for your children.
3. Check out a Two Cents article on the advantages of diversifying your income: https://www.nsbank.com/blog/two-cents-blog/articles/2018/march/six-reasons-to-have-multiple-income-streams/
The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A. Member FDIC