Whether you’ve been a single parent for years or you’re new to raising children on your own, chances are this wasn’t the plan. And that’s life, adapting your plans to new challenges as they appear.
Perhaps the best way to adjust your old plan is with a new plan. When you’re dealing with money, the same advice applies whether you’re single or you’re co-parenting. It is in the details that you’ll find the differences and learn the best ways to deal with them.
The biggest difference, of course, is being on your own rather than sharing responsibilities with a partner. That presents new challenges but can also present opportunities. You can reset your finances, starting with learning how to budget.
Tips for Budgeting as a Single Parent
Budgeting is always a good place to start, regardless of your individual circ*mstances. But let’s face it, a single mom or dad has a different set of challenges and concerns. Still, there are 10 steps you should consider following.
1. Create a Detailed Budget
You may have a general idea of your income and the bills you have to pay, and that’s fine. But that’s not what we’re talking about. The idea here is to sit down and make a list of all sources of income: your job, any benefits, any support from your fellow parent or relatives. Then make a list of all of your financial obligations: rent or mortgage, utilities, food, childcare and related expenses, transportation.
Categorize your spending, identifying absolute necessities as well as optional needs. Be realistic. Wishful thinking has its place, but not when you’re putting together a useful budget. Indeed, finding out where wishful thoughts fit in is why you should budget in the first place.
2. Prioritize Expenses
Wants and needs can feel the same at times, but when budgeting, it’s important to keep them separate. That way, you can focus on your needs first: housing, utilities, groceries, transportation, and childcare. Once you prioritize and take care of those necessities, you can allocate money toward wants, which are also important. Social outings with the kids, outings without the kids (but with childcare), entertainment, children’s activities – are easier to pay for when you’ve budgeted for them.
3. Build an Emergency Fund
Building an emergency fund is considered a foundation for creating a budget. It may be even more important for a single parent. If the idea is that an emergency fund can cover your living expenses for six months in case of an emergency, then it’s important to acknowledge that a single parent is closer to an emergency.
Another difference is that your emergency fund should include the living expenses of your offspring, as well. That means school costs, including supplies and clothing. It can also mean childcare and medical expenses.
Put a piece of every paycheck into an emergency fund, even if it’s only a small percentage. Given time, the account will build up and be a crisis solution.
4. Seek Out Discounts and Free Resources
Fun is not a luxury when you’re dealing with children. It’s a part of a healthy childhood. That doesn’t mean fun has to be expensive, like a trip to an amusem*nt park. It can really come down to spending time with you, and that can mean a day at a state or county park, or a drive in the country where you play car games like “I Spy” or identifying letters on license plates.
Inexpensive or free fun can be found with a little planning. Many museums and zoos have free or discounted admission on certain days. Visitors centers and chambers of commerce often have coupons or discounted passes for local attractions. Your local neighborhood or municipality may have programs for kids in the summer or on weekends.
The discounts and coupons also appear weekly at your grocery store. This can be a critical place to find savings on necessary spending. Make a menu based on the discount buys and BOGO’s available at your store.
There are a variety of sources of financial help for single parents and/or parents with children with special needs. The federal SNAP, AFDC and TANF programs can help with taking care of more basic needs.
5. Manage Debt Wisely
You will likely go into single parenthood with some personal debt, and the transition to new housing, transportation and setting up in a new location could require use of some credit cards. That’s just reality, but so is managing and reducing your debt.
To start with, avoid new debt. You want to get control of your spending, not send it spiraling into orbit. The next step is working to reduce your existing debt, which is challenging with all of the costs you are now dealing with by yourself.
One smart move is debt consolidation. This means reorganizing your debt so that you have one monthly payment at a lower interest rate than your current credit cards and loans. Remember, every dollar you are not spending on interest is a dollar that can help pay bills, buy groceries, or cover kids’ school expenses.
There are different ways to address this. You can negotiate with your card companies or lenders for a lower interest rate. You can prioritize paying your highest interest debt off first. The best move might be to contact a nonprofit credit counseling to find the best solution for reducing your monthly debt obligations.
6. Plan for the Future
Even if you have your hands full in the present moment, and most single parents certainly do, your future is approaching faster than you can imagine. Make plans to pay for college or skills training for the children and don’t forget about retirement savings for you.
A budget will help you organize your finances. Long-term financial goals, such as saving for your children’s education as well as your own retirement, are equally important. Seeing a financial planner or investment advisor can help you include longer-term savings as part of your monthly budget.
7. Communicate with Your Children
Many of us reach adulthood – and adult problems – without much background in handling personal finances. While you’re learning and gaining experience, it’s a good idea to share that new knowledge with your children. Give them the benefit of your wisdom in money matters.
Financial literacy for kids may not seem like a priority with so much else going on in your life, but it can also help you deal with your own money concerns. You can base your lessons on the age of the child, just as you do when teaching about other matters. If they learn the value of money, and the importance of financial responsibility, they can become partners in managing your family’s money.
8. Review and Adjust Regularly
Sticking to your plan is an important part of making your budget work for you. That doesn’t mean your original budget should be your last budget.
It is important to review your budget regularly and adjust as needed. Reconsider your budget if you run into bumps in your financial road, like a change in your income, or as tax season or planning for holidays or vacations.
It will be easier to stick to your budget if it’s realistic and up to date.
9. Seek Professional Advice
You may be doing research and following the best advice you can find, and still your finances aren’t where you need them to be. Like anything from plumbing to auto repair, there comes a time when you need to turn to a professional.
The good news is that a lot of expert advice is available at little or no cost to you. This can be especially helpful if you’re dealing with complex issues, such as debt management, investing, debt consolidation, and estate planning.
You may also want expert advice on nonprofit credit counseling and the possibility of debt settlement. There are experts who understand the best ways to manage debt in your individual situation.
10. Practice Self-Care
While you’re working on your financial health, don’t forget about yourself. A financial plan and sound advice can certainly help you reduce stress and improve your general outlook. But anyone who has children, or has faced a change in their living situation, or has taken on new responsibilities – all of which a single parent is doing – understands the importance of self-care.
Maybe you decided it’s time to cancel that pricy gym membership, but you still need to find other ways to exercise. Keeping fit can also help reduce stress, improve self-esteem, and give you time for yourself. With that in mind, include a little something for yourself in your budget: money for a babysitter, an evening out with friends, tickets for a concert or a comedy club.
It’s easy to get caught up on a hamster wheel of non-stop activity. But remember that taking care of yourself is the best thing for your children and can help you cope with everything else.
Securing Your Family’s Tomorrow
It is a challenge to become responsible for your family’s present and future well-being. It is also an incredible opportunity. No matter what your former habits were, you can seize this opportunity to take the reins and steer your family toward the best possible future you can provide.
Assessing your income, savings, and monthly obligations, then creating a monthly budget to help manage your finances, is always a good idea. Married or single, old or young, childless or a parent – taking control of your finances is smart, helpful, and ultimately empowering.
Your life is a journey, and maybe it has taken some unexpected twists, but you will be happy that you gave yourself and your family the best chance to thrive and stay strong.
