Money Management Guide for Single Parents
So you are suddenly alone – separated, divorced, widowed or simply decided you’re better off independent. You have a job, a place to live, and a little angel for company. What can go wrong?
A lot, really.
Firstly, independence also means total responsibility. You are now on your own. No husband, boyfriend or parents to rely on. You will have to earn money to pay the bills and buy food. You will also have to buy your own clothes, trinkets, and wine. You will have to mow the lawn, change the bulbs, or walk the dog. Most importantly, you will also have to rely on yourself to keep yourself sane, motivated and healthy. You have to be able to take care of yourself.
Secondly, you have a child fully dependent on you. He or she will be relying on you to care for all his or her needs – emotional, financial, social, and spiritual to name a few. Any loving and dedicated parent would be able to naturally care for and nurture her child. But it takes special talents and learned skills to be able to financially sustain a family singlehandedly.
Not everyone is given the financial flair. In fact, a lot of us bungle up our financials. Money mismanagement might not be such a big deal when you were in college, living with your parent, was single and working, or when you were with him – living as a family with two incomes. The ability to handily manage your money is very important when you’re a single parent. It could spell your ruin or success.
Here are the most important money management guidelines for single parents;
Embrace financial independence
Realize that you are independent. Your money is your money alone. You alone can decide how you want to spend it. You are not obligated to share it with anyone. But the independence also comes with a consequence. Now there’s only one income generator – you. You might get child support, alimony, widow’s pension and other financial help but you must not rely on them. It can disappear anytime. You are now in charge.
Arrange for your children’s security
We can prepare for the future, but nobody knows what tomorrow brings. Anything is possible. You can die, you can become incapacitated, or taken away from your children. You must prepare for the worst. Every single parent should make the important legal steps to ensure the security and welfare of their children. Writing a will, assigning an executor, and giving power of attorney to someone you fully trust will safeguard your children from the immediate effects of bureaucracy and legalities.
Invest on health plans
Taking out health plans for you and your children will increase your expenses, but it will definitely save from financial ruin. Medical care and costs are expensive. And you will likely to miss work too. Save yourself and your family from bankruptcy and ruin by securing your medical and health care needs. You can easily manage few dollars added to your bills, not a major medical emergency expense.
Bills first, food second
This might sound weird and impossible, but really, paying bills first before you go grocery shopping is a sound financial strategy to save. First, you have to set up a budget for your bills, food, rent, and other expenditures. Second, you pay the bills and third, you go shopping. Going shopping with your bills money on hand is the easiest way to mess up your budget. It is so easy to toss in grocery items that you don’t really need or give in to your little one’s asking for toys. When you don’t have the money to spend, you’re forced to just buy the essentials. Paying bills on time will save you from paying interest charges and fees.
Ditch the credit card
Credit cards are handy and helpful. But if you’re one of the born spenders, you’re better off without the plastic. Debt is good, as long as you don’t abuse it and when it is used for financial advancement, like when you borrow money to fund a business or buy an income generating investment. Debt is bad when used to pay depreciating assets like cars or gadgets. Remember, borrowing money comes with a cost. For personal finance, it is best to be debt-free. Create a cash flow of your income and expenses, spend the cash you have, and live within your means.
Choose moments over things
Create memories instead of buying stuff. As a single mom, your most precious commodity is your time. There will be a lot to cover – work, second job, part-time job, children, schools, recitals, games, cooking, housework, dates, friends, and a whole lot more. Because of the busy lifestyle, we tend to compensate with material things. Take out dinners, expensive gifts/bribes for the children, or branded clothes.
Instead of doubling up your income to sustain an expensive lifestyle, pare down your expenses so you can afford to lose the second and third jobs. And then have more time to spend with your kids. Choose hiking instead of movies, cook with your children instead of eating out, and teach them the frugal way.
Plan to save
Savings should be a part of your budget. If you have debts, start with paying them off first. Then channel that money to savings. Instead of loosening up on the budget and creeping up your lifestyle, build up a savings account.
Saving up money is the foundation of financial security. That savings, when smartly invested will earn you a second income, without taking any of your time. You can also use the money to start a business. This is how you will get rich. Workers and employees never get rich, it is the investors and entrepreneurs who do. But first, you have to save.