4 Personal Finance Tips for Single Moms
Raising a child as a single parent is challenging enough, but it’s not necessarily the parenting itself that can be stressful; it’s the money. Money is unquestionably the biggest issue that single parents face, and while there are no easy answers, but here are some finance tips that can go a long way in making your life less stressful.
1. Plan to Increase Your Earning Potential
As a single parent, you’re faced with a great deal of responsibility that goes beyond raising the kids on your own. Even if you do receive child support, it’s often not enough to make a dent in your expenses.
The only viable and sustainable solution is to find ways to earn more money. That may mean going back to school, or it may mean asking your boss for a raise. It may mean having to get a new job that offers a higher salary or taking that huge risk of starting your dream business.
Don’t let any opportunity go to waste, and do everything in your power to earn more money.
2. Use a Personal Finance App
Budgeting is important for every adult, but it’s especially important for single parents who have to juggle so many expenses.
Personal finance apps can help by giving you a complete picture of your financial situation and helping you budget your expenses.
“Modern personal finance apps can take care of all our financial dealings with a single click,” says Scott Langdon from Money Task Force blog. “The results are displayed in a beautiful easy-to-understand format”
There are both free and paid apps available. Most free options should more than suffice for the purpose of budgeting and keeping track of your finances.
3. Find Ways to Pay Down Debt
Debt makes it hard to reach your financial goals. If you have to finance it, you probably can’t afford it. There are exceptions, of course, like cars, homes and student loans. But when it comes to food, clothing, travel, and electronics, you shouldn’t buy it if you can’t pay for it with cash.
There’s a good chance that you already have credit card debt – most of us do. Do whatever you can to pay off those balances as quickly as possible. Lowering your debt will allow you to save more money and be one step closer to reaching your financial goals.
It’s not easy to pay down debt, particularly if you’re living paycheck to paycheck. But any additional amount you can contribute to debt will help lower your balances over time.
4. Build an Emergency Fund
Make it a point to build up an emergency fund to cover any unexpected expenses that you may face.
Ideally, you should have three months of living expenses saved.
Along with building an emergency fund, you should also get serious about saving for retirement. Take advantage of any investment benefits that your employer offers, and seek out professional advice on investment strategies that may help you reach your goals.
Retirement may be the last thing on your list right now, but because you’re a single parent, it’s important to make sure that you can take care of yourself – financially – during retirement.
I and my friends always put down a small percentage of our monthly income usually between 5-10% which we mostly use in January for back to school expenses (I guess you can call it Emergency Fund). I don’t know how the school system works in the USA but here in South Africa the schools started a week ago and I can guarantee you that unless you are well off it a struggle for everyone.