As a single parent, you have a lot of responsibilities. You have to meet your work obligations, go grocery shopping, make dinner, do the laundry, and make sure your kids get to school on time. You’re also a part-time doctor, chauffeur, coach, and tutor—to name the least.
As if that weren’t enough, all the financial burden falls on you. And, that might just be your most important role. After all, if you manage your family’s money correctly you might not be able to do all the fun things they enjoy like going to an amusement park or camping for the weekend.
If things get really out of control, you might be depriving your children of basic needs like food, clothing, and housing. That’s a situation that no parent wants to put their children through.
1. Make a Sensible Budget
Why bother creating a budget? Well, it lets you know where your money is going by subtracting your expenses with the money you’re bringing in. When you know this, you can then cut back on frivolous spending and live within your means. As a result, you’ll be able to set and achieve your financial goals.- The envelope or cash system: Here you would create envelopes for each expense. Next, you fill each with the money needed to cover each so that you aren’t overspending.
- The 50/30/20 budget: This method involves you dividing your take-home pay into three categories; 50 percent for your needs, 30 percent for your wants, and 20 percent for your savings.
- Zero-based budgeting: Popularized by Dave Ramsey, this is when you plan for every dollar in your budget.
- The reverse budgeting approach: If you have a goal, this might be the best budgeting technique where you subtract your expenses from your monthly income.
2. Eliminate Debt
If you created a budget, then you should have an idea of how much money you owe. From there, you can come up with a plan to eliminate that debt.Why? Debt isn’t just stressful. It also can put your family’s needs and financial future in jeopardy.
- Set up a payment plan if you can’t pay a bill in order to avoid late fees.
- Combine or consolidate all of your existing loans into a single payment through a debt consolidation plan.
- Handle joint debt. If you shared a phone plan, you and your ex should get your own plans. If you had a credit card together, your ex should transfer their portion of the balance onto their own card.
- Use a tool like Truebill, Trim, or Billshark to negotiate your bills and cancel subscriptions.
- Reduce your spending by buying used or generic items. Find free and fun things for your family to do—my local zoo has free admission. Use coupons, go out for lunch instead of dinner and be mindful of miscellaneous spending like your daily trip to the coffee shop.
3. Enhance Your Income and Net Worth
You deserve a round of applause for paying off your debt and living below your means. If you really want to build your personal wealth though, you need to increase your income and net worth.Common advice is that you add multiple sources of income. But, let’s be real, taking on a second job isn’t practical as a single parent. Besides the cost of childcare, when would you have the time to actually enjoy being with them?
One way around this is to pick up a side gig that you can do from home. For instance, you could be a virtual assistant or customer service agent. You can also put your existing skillet to work. If you know how to code you could design apps or websites. And, you could sell your homemade products on sites like Etsy.
Another suggestion would be improving your marketable skills in your existing position. By taking courses or earning certifications, you’re putting yourself in a better position when asking for a raise. Or, even better, landing a promotion.
4. Ask for Assistance
Even if you’re sticking to a budget and being fiscally responsible, there’s still tremendous financial pressure for parents in the United States. “Without resources like paid maternity leave, universal health care, and preschool, raising children can quickly become a financial hardship for a single parent,” notes the GoFundMe Team. Factor in wage stagnation and unforeseen emergencies, a single parent may need an occasional lifeline.- Women, Infants, and Children (WIC)
- National School Lunch Program
- Summer Food Service Program
- Supplemental Nutrition Assistance Program (SNAP)
- Emergency Food Assistance Program
- Temporary Assistance for Needy Families (TANF)
- Child Care Assistance Program (CCAP)
- Medicare
- Medicaid
- Low Income Home Energy Assistance Program (LIHEAP)
- Federal Government Pro Bono Program
- Head Start
- Child Care Tax Credit
- Insure Kids Now
- Pell Grants
- Teach Grants
- PeaChic Grants
- Huggies Mominspired Grant Program
- Women’s Independence Scholarship Program (WISC)
- Global Fund for Women
5. Know the Tax Benefits
Did you know that as a single parent you’re entitled to the following tax benefits?- Filing as “Head of Household,” as opposed to “Single,” could land you a higher standard deduction. In 2020, this is $18,650.
- Qualified single parents can get $2,000 per child with the Child Tax Credit.
- Do you pay for childcare? If so, you should be able to secure the Child and Dependent Care Credit. FYI, if your child is under 13, you can get a credit up to 35 percent of your childcare expenses.
- Single working parents with low to moderate incomes are eligible for the Earned Income Tax Credit.
6. Be Real About What You Can Afford
Obviously, you want the best for your children. But, you also don’t want to put yourself into debt doing so.There may be times when your kids won’t be happy about this. However, be honest with them and use this as an opportunity to educate them about money and financial planning. For instance, explaining the difference between a want and a need and staying within a monthly budget.
And, from personal experience, I always felt that less is more.
7. Spend Less Time on Social Media
I totally get it. You want to share pictures and moments of your kids with friends and family. And, the easiest way to do that is through social media.There’s nothing necessarily wrong with that. But, you should consider reducing your time spent on these platforms as they making us spend more money.
There are several reasons for this, like receiving targeted ads and keeping up with others’ spending habits. 57 percent of millennials, for example, spent money they hadn’t planned to because of what they saw on social media.
In fact, researchers from Columbia University and the University of Pittsburgh found that extended social media use can reduce self-control—both online and off. Additionally, those who spent more time on “strong” online networks, like Facebook, had higher credit card debt.
8. Protect Yourself and Your Children
“State law (in most places) mandates that you carry car insurance, and your mortgage lender insists you buy homeowners insurance,” writes Emma Johnson for Haven Life. “Don’t neglect disability coverage, and whatever you do, do not skimp on life insurance.”To be fair, it’s understandable why single parents do not have coverage from life insurance. It’s “one more monthly expense in an often very tight budget,” says Johnson. “Also, it is horrifying to think about your own mortality, and formally make end-of-life decisions about who would care for your children in the event something should happen to you.”
- The need for a larger home than those new guardians may currently have
- Extra childcare that the other parent would need to hire
- Expenses like music and sports lessons, summer camps, and of course college educations
- Helping your adult children buy their first homes or pay for a wedding
9. Be Ready for the Future
As long as you have your daily finances in order, don’t neglect your long-term financial goals. For parents, that’s your child’s education and your retirement.What if you can’t contribute to both? You may be better off focusing on your retirement. That may sound selfish. However, your child can always take out a student loan or receive a scholarship. There are no such options when it comes to retirement.
If you haven’t done so yet, start contributing to an employer-sponsored 401K plan—hopefully, it’s one that provides matching contributions. You could also set up an individual retirement account. Even if you start out small, like 50 bucks a month, it’s better than nothing.
Once you get a grip on your retirement, you can open up a savings account for your child’s education. Explore options like an ESA (education savings account) and a 529 college savings fund. By the way, both offer tax breaks.
