Last Updated on August 6, 2022 by Rebecca Huff
Effective Budgeting Tips for Single Moms to help you stretch your dollar and make the most of your budget.
As a single mom, budgeting is of the utmost importance. You may have a limited income and a shortage of time to earn more. That was where I was twenty-something years ago. I had a low-paying job, no child support, no savings account, and a long list of bills to pay. Looking in my bank account gave me serious anxiety during those days.
You may feel overwhelmed when you think about financial planning. Heck, grocery shopping can even be stressful on a single mom's budget.
Don’t worry! With some planning, you can implement these effective budgeting tips for single moms.
Remember that improvements don’t have to be elaborate to make a difference. Even small changes can add up when it comes to money management.
Financial Goals
When you live paycheck to paycheck, as many people do, it’s easy to end up in debt. Single parents aren’t the only people who may be living paycheck to paycheck. Many married couples and singles without kids also struggle to earn more than they spend.
With inflation at an all-time high, 8.5% as of March 2022, assigning every dollar you earn to a budget category and sticking to your guns is crucial. Once you get started in the habit of saving money, you may get addicted to it!
Setting realistic financial goals will help you do more with your money. So let’s get started.
Banking Wisely
If you recently became a single mom through a divorce, check to make sure your bank accounts only have your name on them. The same goes for your insurance policy beneficiaries; update those according to your current wishes.
Make wise choices when it comes to your savings. Most parents don’t want their kids to require student loans to get through college, but there are plenty of avenues to pay for education. Your retirement plan is solely dependent on you taking the initiative.
If you have to decide between your retirement vs. their college, plan to help them get grants or scholarships!
If you only have a checking account now, consider opening a savings account. A checking account is for short-term needs. The money you deposit there is to cover daycare, utility bills, groceries, gas, etc.
A savings account is for long-term needs. Even if you can only deposit the minimum amount necessary to open one, this is where you will put money for your emergency fund.
Emergency Fund
Set a goal and work towards increasing the balance in your emergency fund to what you feel comfortable with. Some say a thousand dollars is an excellent place to start. Ideally, have enough in savings to cover 4-6 months of expenses.
Having money set aside when the unexpected happens will reduce stress. You’ll also be more likely to avoid credit card debt.
Having a monthly budget will help you plan for unexpected expenses as well as
Negotiate Everything
Can you negotiate childcare into your salary? Ask your employer about benefits for parents.
Negotiate everything. The cost of gym memberships, how many vacation days you get, and even medical bills. Especially medical bills! Never pay the first bill, no really; they don’t even expect you to pay that much! Don’t believe me? Read Marshall Allen’s Never Pay the First Bill, And Other Ways to Fight the Health Care System and Win.
You’ll learn to negotiate medical costs, with or without health insurance, and get the best deal possible on medical care and medication.
Life Insurance Policy
Let’s face it; single parents have enough to stress about. Still, it’s wise to plan for who will take care of your children if something should happen to you. In addition, a life insurance policy will provide the financial means in case that should happen.
Keisha Blair has excellent advice for women to be financially savvy. She became a single mom after her husband unexpectedly passed away. At that time, she had a toddler and a newborn. Thankfully, they had life insurance.
As a single parent, life insurance is crucial so your children will be provided for if anything ever happens to you.
Credit Cards: Let them pay you, not the other way around
Credit cards can be a slippery slope, so use them with caution. If your financial goals include saving money you’ll want to avoid credit card debt.
I’m dating myself, but as a single mom in my 20’s, I had one credit card. A Texaco credit card for gas purchases. Since my preferred traveling time was at night while they slept in the back seat, I didn’t want to wake them to go inside and pay for gas.
My solution? I used the credit card to pay at the pump without going inside. This was when most of us still paid for everything with cash or checks.
Even though I used the card, I was diligent about paying it off every month from my checking account. My parents never had credit card debt and taught me to make ends meet without borrowing money.
There are perks, however, to having credit cards and depending on the amount of money you spend monthly, you can make a bit of extra money by using them wisely.
Depending on your credit score, you might qualify for a card that gives you money back or some form of spendable points.
The Citi Double Cash Card gives you 1% back on purchases and 1% back on repayments. You must pay at least the minimum due on time to earn cashback. *Make sure to read the terms carefully!
The Citi Double Cash Card has an interest rate of 14-25% depending on your creditworthiness. You will want to pay it off so you aren’t paying high-interest rates. If you will be tempted to overspend with a credit card in your wallet, best to steer clear of them altogether.
Better safe than sorry or deep in debt.
If you can use credit cards responsibly to pay for groceries, diapers, gas, and clothes, you’ll get back some of what you spend, but only if you pay it off each month. (Like a little side hustle!) It can be very tempting to use a card when you don’t have the cash to buy what you need, so think about this carefully.
Side Hustle for the Single Mom
Speaking of side hustles, one of the most effective budgeting tips for single parents is to have more than one stream of revenue. Spend some time brainstorming. What are you good at, and where do your skills lie? Can you make a profit off something you already know how to do? Ask your friends what they think you’d be good at.
Are you a whiz at creating spreadsheets? Sell them on Etsy or even on your own website. Lots of bloggers make a decent living selling printables. Suzy at Start a Mom Blog is a great place to start if you want to learn to make money from printables.
Maybe you’re good at photography and can do some photo shoots to make extra cash. Try to capitalize on skills you already have.
Tips to Help Save Money
You may not need to utilize all of the tips listed below, but one or two will hit home. The library is an excellent resource for books on budgeting, investing, and other financial subjects. Take advantage of your local library to learn ways to help you do more with your money.
Monitor Your Spending Habits
Using budgeting software makes it easy to see where you are spending money. Do a search for “Amazon” for an eye-opener.
Amazon shopping can be a time saver for a single mother but can also hinder frugal living goals. We spend a lot of money on Amazon, and “add-on” purchases can add up!
Frequently go through your subscriptions to weed out anything you’re not using. Eliminate what you can to save money. Apps like TrueBill can help with this if you’re not good at monitoring or negotiating lower payments.
Shop for Better Cell Phone Plans
We lowered our monthly cell phone bill by two-thirds by switching carriers without giving up coverage or functionality. Many people pay more than necessary for phone plans because they haven’t shopped around.
Utility Bills
Many utility companies will let you make the same monthly payment year round. These budget-billing plans can give you more predictability throughout the year. Instead of paying higher bills in the winter when you need to heat your home, your bill will be averaged over an entire year.
Tax Credits
You may qualify for tax credits for dependents and even education costs. Find out everything you can about earned income credits by reading up on IRS.gov.
Bottom Line
These are just a few effective budgeting tips for single moms that helped me get by on only $35,000 per year with four kids back in the 90s.
Learn more about personal finance so you can make informed decisions regarding investments, retirement plans, etc.
If you're in dire need, consider applying for a grant. You can look for grants at this directory or a scholarship to go back to college here.
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