Tips for Financial Success
Managing finances as a single parent can be difficult. Single parents are faced all at once with the tasks of adjusting to one income, creating and maintaining a budget, and planning for their financial future. As a result, single parents may often feel overwhelmed when it comes to managing their finances. The following tips can help you create a financial plan to help you and your family be financially successful.
Create a Budget that Works for You
Developing a monthly plan for your money is important. Make a list of all sources of income as well as your monthly expenses. Be certain to include an expense category for emergencies to work toward building an emergency fund.
Elizabeth makes enough money each month to cover her bills and spend a little extra on herself and her kids. When her car needed new tires, however, the expense was a little higher than expected, so she paid with credit. To help with future emergencies, Elizabeth setup an automatic withdrawal from her checking account into her savings account every two weeks.
Ask for Help
Asking for help can be hard. Sometimes, however, it is the best thing that you can do for you and your family. Many communities offer resources geared toward single parents that can help you figure out how you may best manage your finances and time. Friends and family are also great resources.
A single mother of two, Jessica asks her stepmother to help watch the girls on occasion. Time to herself helps Jessica catch up on housework and errands, and her stepmother enjoys time with the granddaughters.
Pay Your Bills On Time
While this may seem like common sense, being on top of everything can be overwhelming for someone becoming a single parent, and deadlines can get lost in the chaos. Paying your bills on time will guarantee that you keep your credit score in good standing and avoid late fees. Automatic payments set up through your banking institution are a great option for single parents.
Overwhelmed by staggered deadlines, Scott missed several credit card payments in a row, causing his credit score to drop. A friend suggested setting up automatic payments online and using the notifications feature on his phone to help him remember to check that he had enough money in his bank account before a payment was due to go out.
Keep Extra Costs Under Control
One of the hardest changes for single parents to make is cutting back on extra costs. It is important that you explain to your children that the new family budget may mean that you are unable to participate in some activities that you were once able to. A weekly family night at the movie theater may not be possible, but you can be creative and bring family movie night to your house.
To make entertainment costs more manageable, Alex cancelled cable and opted for Netflix instead. The online streaming service is cheaper and still allows his family to enjoy Friday movie nights.
Protect Your Children
Making sure that you and your family are insured can have a huge impact on your financial security. Health insurance helps insure that an unexpected injury or illness will not ruin your finances while life insurance will help financially protect your children in the event of your death.
Parents often focus on saving for their children’s future. It is just as important to save for your future financial goals and retirement. A financial adviser can guide you in the right direction, explaining the many different options with you.
Educational programs of Kentucky Cooperative Extension serve all people regardless of economic or social status and will not discriminate on the basis of race, color, ethnic origin, national origin, creed, religion, political belief, sex, sexual orientation, gender identity, gender expression, pregnancy, marital status, genetic information, age, veteran status, or physical or mental disability.
Written by Jennifer L. Hunter, Kentucky Extension Specialist for Family Financial Management; Kristyn Jackson, LMFT, Ph.D. Candidate, Department of Family Sciences; and Lauren State, Oldham County Extension Staff Assistant.