Raising children is a rewarding experience. But it can also be an expensive one, particularly if you’re doing it on your own. As a single parent, you’ll wear many hats, including part-time housekeeper, chauffeur, tutor, and doctor. Tack on managing the household’s finances and you might find yourself feeling overworked and overwhelmed.
Budgeting as a single parent can be tricky, but it is possible. And when you commit to it, keeping up with household bills, contributing to savings, and building your wealth will become much easier. Use these tips to help you build a winning budget and take control of your finances this fall.
Take Inventory
We get it—if money has been tight, it can be scary to check the number in your bank account. But because your household income and some (if not all) of your expenses have likely changed, it’s important you learn how to actively manage what you have.
So, to start, gather as much financial information as you can, including your monthly cash flow and debts. Make sure you’re clear on all sources of income and expenses here. This includes alimony or child support. Knowing exactly what you have and comparing it to your typical spending habits will help you tailor a budget that honors your financial goals, learn where you can reduce expenses, and make smarter financial choices overall.
Eliminate Debt
Now that you’ve reviewed your debts, you’ll want to think about how you can pay them down. To get you started, you might consider one of these two debt repayment strategies—the avalanche method or the snowball method.
In the avalanche method, focus on repaying your highest interest rate debt first, like credit cards, while making the minimum monthly payment on others. Then, once you’ve paid off the highest interest rate debt in full, move onto the second-highest interest rate debt, and so forth.
By focusing on the loans that are the most expensive to carry, you’ll pay less in interest over time.
If you’re looking for quick wins, consider the snowball method instead. Here, you’ll prioritize debt balances by size, paying off the smallest balances first. You’ll see progress more quickly with this strategy, but will hold on to higher interest rate debt longer, so be aware.
Either approach is both an effective and efficient way to move toward a debt-free lifestyle, so choose the one that works best for you, your budget, and your family.
Budget Monthly Expenses
Now that you know where you stand financially and have a plan for paying down your debt, it’s time to make sure you can keep up with it. Creating a budget can take some of the organizational pressure off, help break the paycheck-to-paycheck cycle, and guide those debt repayment decisions. So let’s get into it.
The best way to stretch your income is to weigh your needs versus wants. Needs, like housing, utilities, food, and transportation, should take priority. Wants, like toys and fancy coffees, should hit the back burner. The goal is to make sure your most important expenses are always covered first, so the more you can trim spending, the better off you’ll be. Consider cooking instead of running through the drive-thru, canceling unused streaming services, and finding fun, free things for your kids to do, like going to the playground.
Budgeting for single parents isn’t a one-and-done thing. You’ll want to review your budget monthly to adjust it when your expenses or income change. Always keep a close eye on your spending, so if you find you need to cut back even more, you have a good idea of where to start.
Increase Your Income
As a single parent, your income might come from a full-time job, a part-time job, child support, or government assistance programs. But what if it’s just not enough? Don’t panic—there are plenty of low-stress side gigs that can help you earn a little extra cash. Consider decluttering your home and hosting a garage sale, starting an Etsy shop, or checking out some work-from-home options like blogging or proofreading.
Plan for the Future
You can’t help others until you’ve helped yourself. This old saying couldn’t be more true in parenthood. As a single parent, you likely invest most of your time and money in your children, but It’s important you don’t forget to invest in yourself too. Take the time to practice financial self-care and plan for your future.
Though it’s easy to fall into the trap of focusing on what you lack financially now or where you want to be doing better, it’s beneficial to maintain a positive money mindset. Allow yourself to set financial goals, even if they feel out of reach. Once you’ve got your recurring household finances established, you can focus on taking the steps to meet them. Ask yourself some questions:
● Do you want to go back to school?
● Are you looking to buy a house?
● How can you start setting money aside for your children’s education?
● Can you increase your retirement contribution?
● Do you need to be looking for a better-paying job?
● Is traveling the world a bucket-list item?
Don’t be afraid to dream big. You deserve it. And if you’re struggling right now or find yourself feeling like the grass might be greener on the other side (green being the color of wealth), goal setting is a great way to redirect your focus back to your own yard.
Parenthood is hard. Single parenthood is even harder. Allow yourself some grace and start applying these tips to your daily life. You’ll be able to work toward financial independence and teach your children good money habits along the way. It’s a win-win!
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