Raising children without a partner is an enormous challenge—emotionally, physically, and especially financially. Overwhelmed by the work involved in earning a living and caring for children, single mothers can sometimes feel they will never be able to break the cycle of living paycheck to paycheck. But even if you are a single parent on a limited income, you may find that simply managing your money better can alleviate your financial problems and allow you to save for the future.
Analyze Your Expenses
The first step is to take stock of your situation. What are your fixed costs? How much do you pay for housing, utilities, transportation, and childcare? If these expenses alone eat up most of your income, leaving you with little money for groceries or discretionary spending, then you should consider whether some of these costs can be reduced or eliminated entirely.
If your mortgage, property taxes, and utility bills are too much for you to reasonably handle, selling the house and moving to a smaller place may be your best option. It will likely be difficult for you and your children to leave the family home, but the prospect of having more money to spend on other things may cushion the blow. Similarly, it may make sense to trade in that late-model minivan for more fuel-efficient used station wagon.
If you need childcare while you are at work, there may be ways to reduce your costs. Daycare centers are often more expensive than programs offered by churches or the local YMCA. If your children only require after-school care, a stay-at-home mother may be willing to help out in exchange for your babysitting services at other times. You may also want to speak to your employer about whether you can work a flexible schedule or do some of your work at home. If you must pay for childcare, be sure to claim all available tax deductions and credits.
Control Spending, Start Saving
Next, assess whether you can cut back on other forms of spending. By keeping a diary of all expenditures over the course of a month, you will likely identify some fat that could be trimmed from your budget. Simply replacing takeout with fresh, but easy to prepare, meals can save a bundle.
By getting your spending under control, you can start planning for the future. After establishing a fund for emergencies, you should think about your retirement and education goals. If your workplace offers a 401(k) plan, try to contribute at least enough to take advantage of your employer match. You may also want to consider putting money into an IRA. If paying for your children’s college education—or your own—is a priority, there are several tax-advantaged accounts that can help you save efficiently.
Secure Insurance Protection
While money may continue to be tight, it is important not to overlook the need for adequate health, life, and disability insurance. How would your children cope if you were gone or no longer able to work? Having some coverage in place to protect your family may be less expensive than you imagine, and it will ease your mind. All families need health insurance; if you do not receive benefits through your employer, look into a high-deductible catastrophic policy that covers the costs of serious illness or hospitalization. Depending on your income, your children may be eligible for public health insurance programs.
Despite all your efforts to cut costs and adhere to a budget, you may still find yourself with credit card debt. If possible, move the debt from higher-interest to lower-interest credit cards. It is usually best to resist the temptation to consolidate your debt, as many of these services charge high fees.
Sticking to a budget can sometimes feel like an exercise in deprivation, but it doesn’t have to be if you set aside money for a few treats, like a weekly family pizza night. Even if you can only contribute small amounts, create a “fun fund” to be used for a vacation or a trip to the amusement park. Providing for a family on your own is a challenge—but one that can be met with good habits and careful planning.