Living on one income can be a challenge. Living on one income and being a single parent can turn that challenge into an ever present source of stress and anxiety.
Sure, the basics are the same:
- Track your spending
- Create and stick to a budget
- Build an emergency fund, and
- Work on paying off your debt
The difference is that as a single parent, you have so many more responsibilities pressing on you every day that sticking to the basics is no easy feat.
Very few of us start out planning to be single parents.
For some, it’s brought about by the death of a spouse. For others, it’s the breakdown of a relationship. It really doesn’t matter how it happens, once it does, you’re on your own: literally and figuratively.
I’ve spent the last 14 years as a single mum. I know how hard it can be when you’re both mum and dad to your child(ren), not to mention, housekeeper, gardener, home maintenance guy/gal, financial controller and taxi driver. Just to name a few of the responsibilities that fall on the shoulders of single parents. There’s very little space in your life for anything other than sleep and there’s never enough of that!
It also doesn’t matter if you’re a single mum or single dad, you’ll face plenty of the same challenges: exhaustion, stress and probably not enough money. All those things contribute to making it much more difficult to stick to a financial plan.
They make it more difficult but not impossible.
Now, back to those basics…
Track your spending
When you track your spending, track every single dollar you spend. Every. Single. Dollar.
Yes, it will feel extremely tedious and yes, you’ll probably resent it as one more thing you have to do. Do it anyway.
The reason you need to track every dollar is that sometimes we dismiss expenditure as, “Oh, it’s just a dollar, it wont matter”. The truth is, if you spend ‘just a dollar’ every day, that’s $30 dollars per month and $365 per year.
That money will create a very big black hole in your budget if you don’t note it down.
Conversely, save a dollar a day and you’ll have a pain free $365 saved in a year.
Create and stick to a budget
Take your notes from tracking your spending plus all your irregular bills (utilities, insurances, car maintenance, etc.) and write it all down. No need to get complicated, ultimately you just need two columns on a sheet of paper. One column heading should be “Income” the other “Expenditure”.
Budgeting is much easier to do if you’re on a set wage but it’s not impossible if you’re on a variable income.
For simplicity sake, use your after tax income and multiply it by the number of pay days you have in a year. For example, if you’re paid fortnightly, multiply your pay cheque by 26.
If you have a second job or side hustle, only include the minimum guaranteed amount you’re likely to receive. Everything else is a bonus and should be used for your emergency fund or paying down debt.
Then, list all your regular spending per month (multiplied by 12) plus yearly amounts for your irregular bills, in the other column. Also include your minimum debt repayments and at least $20 per week for your emergency fund.
Add up both columns separately. At the bottom of each column you’ll have your expected income and expenditure for 12 months.
Now for the scary question… Which is bigger?
Hopefully, it’s income! If it isn’t, don’t despair. Check back through your spending tracker (notebook or app) and see what you can cut out or cut back on.
One of the most important expenditures single parents need to consider relates to child care (before and after school, school holidays) and/or potential loss of income if your child is sick and you have to miss work.
Even though my own parents were nearby and willing to lend a hand whenever I needed it, there were still times I had to find the funds to cover things like school holiday programs. Make sure you consider this expenditure in your budget planning.
And, that brings us to the next budget basic for single parents, the emergency fund.
Build an emergency fund
You’ll notice that emergency fund is listed before Work on paying off your debt. The reason for this is a simple one. Without an emergency fund, you’ll always be at the mercy of your credit card or worse still, pay day lenders.
Having a $1000 emergency fund should be your first goal after creating your budget. Try to set aside $20 every pay day to build your emergency fund. Make it a priority.
Yes, you might have to adjust your lifestyle a bit but I can guarantee you, you will never regret going without your daily latte or weekly take out in order to build this buffer between you, your kids and adversity. I’ve been there. I know how good it feels to have an emergency fund in place. I want you to know that feeling, too.
Work on paying off your debt
If you don’t have any debt, awesome! Give yourself a pat on the back and continue building your emergency fund until it’s at least equivalent to 3 months expenditure. Better still, make it 6 months.
If you’re carrying any kind of consumer debt, like personal loans, credit cards, or those previously mentioned pay day loans, make it a priority to start paying it down as quickly as possible.
The less debt you have, the easier you’ll breathe.
Check out these posts for more information on how to pay down your debt, quickly and simply.
- The Secret to Paying Off Debt
- Quick Tips for Demolishing Your Credit Card Debt
- Your debt relief plan: face your debt, make a plan & eliminate debt forever
- The Top 5 Online Debt Reduction Calculators
Simple tips for reducing your spending
I think I’d be safe in saying that most single parents find they need to cut their spending so they can build their emergency fund and start clearing their debt.
Here are 12 simple ideas to get you started. You’ll find a lot more here.
- Shop differently. Kids seem to grow out of stuff overnight. One day their jeans fit perfectly, the next day their ankles are on full display. You can make some major savings on children’s clothing by shopping at either consignment or thrift stores. It’s also worth checking Facebook to see if your neighborhood or community has a group page where members can buy or trade clothing.
- Keep a shopping list on your fridge. Put a slip of paper on your refrigerator and note the items you need from the grocery store. Grocery shopping with a list is one of the best ways to keep your spending under control.
- Buy generic instead of name-brand. If you haven’t bought generic store brands before, start with the basics (flour, sugar, butter, etc.) first. Then branch out to other products like cheese or black tea. Some generics are better than others but each person’s tastes are different so while recommendations from others help, experiment for yourself, too.
- Make your own coffee. You can brew your own cup of coffee and add all special extras you want for a lot less than you’d pay at a cafe. Invest in a travel mug and make that coffee to go!
- Join your local library. Free books. Free movies. Free audio books and downloads for your Kindle. A library card gives you access to a wealth of entertainment options, including story time for little ones.
- Have a special family night at home. If you’re used to going out to the movies or dinner as a family, try making one night a week a special ‘in home’ movie and dinner night. Borrow a DVD or three from the library, cook your favourite take out at home, pop some popcorn, dim the lights, throw all the cushions on the floor, grab a blanket or two and get comfy.
- Cut your cable connection. I know, d’uh! You can do comparison shopping to find the best deal but at the end of the day, if you need to save money, you need to cut your cable subscription completely. There are cheaper options around like Netflix. But the best option for movies especially, is the library.
- Use cash. Handing over cash when making a purchase is visceral. You feel it in your gut. Credit cards numb that pain (see this Carnegie Mellon study to learn more) and you inevitably spend more than you would if you had to hand over cold hard cash.
- Get fit on a budget. You don’t need to spend a hefty amount at the gym each month to maintain your fitness. Learn more about getting fit on a budget here.
- Get outside. Take advantage of a sunny day by having a picnic in the park with your family. The other bonuses are that being out in nature will help calm you if you’re stressed (the kids, too) and it’s great bonding time. Don’t forget to take along a ball to kick or throw.
- Borrow or check for used before buying new. Sometimes you can’t help having to spend money. An appliance might need to be replaced or you have some other specific and pressing need. First, if you only need it for a short time, see if you can borrow the item from a friend or neighbour. If that’s not an option, check to see if you can buy it used (and in excellent condition) before considering buying it new.
- Have a cake date. Sometimes, one of the hardest things when you’re a single parent is finding both the time and the money for a social life. Spending time with your friendship group will be money and time well spent, just don’t go overboard. Instead of going out for dinner, meet for coffee and cake. It’s much cheaper and what could be sweeter than sharing dessert and a few laughs with the people who’ve always got your back?
What are you waiting for? Start using these smart money habits and create a simpler and happier life, today!
This post may contain affiliate links.