Manage Your Finances

Money Management Tips for Single Parents

As a single parent, you have a lot on your plate. Even if there is another parent somewhere in the picture, it is still likely your responsibility to take care of your child, ensure that they get to school, and find a way to provide for them financially.

The issue is that many single parents can sometimes struggle with paying for their kids on a single income, and it is natural to get anxious when it comes time to pay the bills.

Sometimes, that anxiety can even impact our physical health.

While it can be hard at times, you can provide a nice and secure life for your children with smart planning, a detailed budget, and a plan for the future. Let’s talk a bit about the struggles that many single parents face and how to come out on top.

Spend Money Where It Matters

If you are a single parent that is unsure about how to figure out your financial situation and create a good life for your kids, then know that you are not alone. Statistics show that single parents make up 6% of the American workforce, and nearly 24 million children live in single-parent families.

The result is often a single income that needs to cover you and your children while putting a roof over your heads. Because of the many restrictions that single parents face, they are more likely to end up in poverty than parents who are together. 

A single parent might also have additional financial responsibilities that a couple may not. For instance, if you have to work, then you likely need someone to watch the kids, and that will cost money. 

Needless to say, you need to be cautious about where your money goes, so make it a point to prioritize what matters most and that includes putting money aside for health insurance for everyone in your family. If possible, sign up for the insurance through your work or look at or a state health insurance exchange. Also, put serious consideration into which insurance policy will give you access to video visits and telehealth. 

Video visits are great, especially if you have your hands full, because you can do them from anywhere and get the same high-quality consultation that you would get from an in-person doctor. Plus, some insurance plans will completely cover virtual visits, so you don’t have to pay a dime. 

While you are putting money away where it matters most, consider also creating an emergency fund, which you can use for any number of sudden emergencies, from a natural disaster to home restoration to a car accident that leaves you without transportation. To create this fund, put a portion of every paycheck into a separate account and do not touch it unless absolutely necessary. This fund can be a real lifesaver when you need it most.

Lastly, remember to spend money in ways that will save you more money in the future. For example, an investment in a more reliable set of tires, premium oil, and regular maintenance all represent affordable ways to improve your car’s performance and ultimately save you money on things like gas — not to mention the money saved in a preventative sense. It’s always cheaper to maintain a vehicle than pay for repairs after it breaks down.

Create A Strong Budget

If you are finding that you are short on funds after paying for health insurance and putting money in your emergency fund, then it may be time to create a detailed budget. You should start by sitting down and notating every income stream that you have, whether that is from your job, spousal support, a side hustle, and anything else that you can count on every month. 

Next, you need to create a comprehensive list of expenses that you have on a recurring basis. You really need to think about this and look at your bank statements, so you don’t miss anything important. Expenses include anything from utilities to car maintenance to grocery bills and your mortgage payment. Leave no stone unturned. In addition to the mandatory bills, you will also want to consider your discretionary expenses and eliminate what you don’t need.

Discretionary expenses in this regard might include the monthly streaming services that you subscribe to each month, the money you spend on coffee and lunches out every day, and the cash you spend to have fun on the weekends. If money is tight, then you need to start to weed out what you no longer need. Instead of going to Starbucks every day, brew your coffee at home. Or, if possible, avoid buying books for the kid’s class and instead borrow them from the local library. You’ll be amazed at what costs you can cut when you really think about them.

Just remember that you can still have fun while on a budget. Assign a portion of your leftover money each month to entertainment so you can still go out on the weekends and bond with your kids.

Saving For The Future

Now that you have your money budgeted for today, you will want to start to think about the future. If you plan to start a college fund for your kids, then it is important to start right away, so your money can grow, and the fund will be large enough when it comes time to go off to school. Consider looking into a 529 college savings plan that will allow you to put away money with some great tax advantages. If you want to save money but also have access to it over time, then consider investing it in a high-interest savings account so you can earn extra funds as the years go by.

Somedays, it might seem like you may never be able to retire, but with a proper plan, you can put some cash aside for down the line. If you are employed, then invest in your company’s 401k plan. If that is not an option, then consider contributing annually to a ROTH IRA because the contributions can be withdrawn tax and penalty-free at any time in the case of an emergency.

If you would like to put more money aside for the future, then consider getting a side hustle. Many side jobs, including freelance tutors, writers, and delivery drivers, allow you to work on your own schedule, so you can still be there for your kids whenever you want to be. Consider putting all of the money that you make from your side hustle into your savings accounts and the cash could add up quickly.

As you can see, there are many tactics that single parents can use to try to save money for the future and live a comfortable and happy life. Consider these tips and feel confident that you’re doing what is best for your family.

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