Raising children and managing money are always a challenge, but even more so for a single parent. For parents on their own, staying on budget and saving for emergencies may seem impossible. But we have some advice to help you out on this MoneyWise.
- For single parents grappling with money issues, a good place to start would be with an organization. If you suddenly find yourself taking on the role of a single parent, maybe you weren’t the one doing the bills and handling finances.
- So get yourself a folder or binder to start gathering your financial documents. You can expand that to a more extensive filing system as you go. Then, gather up all of your paid bills and keep them in one place. You could use another folder for that, but even a shoebox will work.
- Now you need to make up a chart or calendar for all of your bills and the days of the month when they’re due. If you see dates coming up soon and you know you won’t have the money to pay one or more of those bills, contact the creditors and let them know your situation. They may be able to give you an extension or help in some other way.
- Keep in mind that it’s never a good idea to run from your creditors. Run toward them instead. This will help preserve your good credit rating.
- CREATING YOUR SPENDING PLAN
- Now you’re ready to draw up a spending plan. Don’t worry about it being perfect, just do the best you can, and know that it will change in the months ahead.
- The free MoneyWise app is a great tool to develop your spending plan. It has three different ways you can set up your budget. One of them will work for your particular situation. You can download it wherever you get your apps.
- As you set up your budget, you’ll input your total monthly income and then assign money to the various categories you set up. Besides your recurring bills, these would include your giving, groceries, debt, and other expenses.
- You have to keep spending in the various categories to within limits for this to work. We won’t list a percentage for every category today. But just know that you’ll have problems if more than 25% of your take-home pay goes to housing. You shouldn’t exceed 15% on either food or transportation.
- Of course, the goal is to have some money left over. You need that margin, or discretionary income, to start building your emergency fund and to invest for the future.
- Now, if you discover that you don’t have enough to cover all your expenses, don’t panic. It’s not the end of the world. You have two options: You can find ways to trim your expenses or look for ways to bring in extra money. Or both!
- TRIMMING EXPENSES
- Let’s start with cutting your expenses. Go over each category in your budget … one at a time … and think of ways you can cut spending.
- The grocery category is often a place where you can trim without sacrificing nutrition. Avoid processed packaged foods and prepare your own meals. Make a list before you go to the store and stick to it. Avoid eating out.
- If you can’t cut your cable entirely, can you go to a more basic package? Or one less streaming service? The same with your phone. Can you get by with a less expensive plan?
- You need adequate insurance for your home and auto, but if you combine the two, you can probably save money. Once you’ve trimmed all of your categories, you may find that your budget is balanced.
- EARNING EXTRA CASH
- If not, then you’ll have to look at the income side of the equation. You’ll either need to pick up more hours on your job or look for a second one. If you feel you deserve a raise but you were putting off asking your boss, now is a great time to do it. Employers are still desperate to retain good workers.
- A lot more “work from home” opportunities are available these days, but be careful because there are plenty of scams, too.
- And a last word for single parents experiencing financial difficulties, God is with you, regardless of your circumstances. Deuteronomy 31:6 tells you, “Be strong and courageous. Do not fear or be in dread of them, for it is the Lord your God who goes with you. He will not leave you or forsake you.”
On this program, Rob also answers listener questions:
- How can you participate in faith-based investing when just starting out in investing?
- Can you invest for retirement while receiving Social Security disability?
- Can you put an I-bond into a retirement account?
- How can you manage all of the rising costs today?
- How would paying off your car affect your credit score?
Remember, you can call in to ask your questions most days at (800) 525-7000 or email them to Questions@MoneyWise.org. Also, visit our website at MoneyWise.org where you can connect with a MoneyWise Coach, join the MoneyWise Community, and even download the free MoneyWise app.