Being a single parent is a lot of work since you juggle multiple roles for things to run as they should. From taking care of your children to working to ensuring that all bills are paid on time, it’s easy to feel as though everything is falling apart. That’s completely normal. If it’s any consolation, raising kids, budgeting, and planning for the future is a challenge for many people irrespective of their income or marital statuses.
But as a single parent, you cannot afford to make mistakes. Your kids look up to you for everything. That’s why you need to be smart about your finances. To help point you in the right direction, we will highlight some of the best financial tips for single parents.
Create a budget
You’ve probably heard about this, but we will mention it anyway. Many people overlook the importance of developing a budget, assuming that they have it all figured out. But the reality is they haven’t. Creating a budget allows you to see the flow of money. It shows you the monies coming in, and the monies going out. And as you may know, there is one rule to live by – never spend more than you earn. As a sole breadwinner, you need to create a budget and make adjustments to ensure you are only spending within your means.
Put systems in place
Creating a budget is one thing, but sticking to it is another. That’s why you need to put a system in place that will help you keep your finances in check. Whether you write down your expenses in a book or use a budgeting application, you’ll find it a lot easier to monitor your spending when you have a record. This way, you’ll consistently track and stay on top of your finances and thus be aware of your spending and financial situation.
Differentiate needs from wants
If your expenses are way beyond the roof and you only end up in debts or not being able to save, it might be time to differentiate your needs from wants. Of course, this is often easier said than done. But keep in mind that your ability to stay real about spending will help you navigate the financial waters safely. Look at how you spend money every month and adjust where necessary. For instance, if you spend so much on one category, like eating out, then minimize on another like buying clothes until everything falls into place.
Pay your debts
Debts have a way of interfering with your finances. If you are in debt – whether due to understandable situations like loss of a job, medical expense or any other reason – it’s essential to work out ways to offset them as soon as you can. Setting up an emergency account is also a great way to shield your finances against any unforeseen circumstances.
Get life and disability cover for your children
We all hope for things to run smoothly, but sometimes, they don’t. To be on the safer side, you should get the best dental, medical, and vision insurance coverage to protect your loved ones. You may also want to consider buying an adequate disability and life insurance to insulate your kids from your possible loss of earning power or death.
Change your career path
Sometimes, all you need is better pay. In which case, you’ll have to consciously decide to find something better. If you’re having a hard time transitioning, it might be a good idea to speak to your friends who are doing better than you are. Attending seminars organized by industry leaders and strategists is also a great place to start. Additionally, you can meet with your community’s career counselors or staffing firms to learn about your options.
Be open with your kids
Although you should not disclose how much you make or your financial situation with your child, being transparent can ensure the both of you are on the same page. If you cannot afford to pay for certain activities or wants, tell them you cannot afford it and recommend a cheaper alternative. It might also be a good idea to teach your child about basic financial concepts like budgeting and saving. This way, they’ll know that everything comes at a price – and that money does not equate happiness.