A solid budget plan and action taken towards reaching your financial goals are imperative for not just survival but the well-being of a single-parent family. Certainly, money can’t buy you happiness, but the lack of it or poor decision making regarding it can cause severe anxiety, stress and limited opportunities.
Handling money is challenging but here are several fundamentals to being financially successful as a single mom.
Set up a budget plan
According to the Australian government statistics, 79.8% of single-parent families are single moms raising their children with little or no help from their fathers. Over 20% of those dads see their kids about once a week, and the average child support received is $1,521 per child per year making it less the $130 per month.
This is exactly why you should bother about your budget so you have a clear picture of where your money goes, how much you bring in and what your expenses are. Once you know this, you can manage your finances better and live within your means. This will also enable you to achieve your financial goals.
However, there is no one-size-fits-all budget formula. So you might try experimenting with different budgeting methods – create envelopes for each expense, try the 50/30/20 formula, or opt for free budgeting tools that will calculate everything for you and keep you on track.
Be realistic about your expenses
As a parent, you naturally want the best for your children, but not at the expense of going into debt. Sure, there will be times your kids won’t like it, but honesty is the best policy – inform and educate them about money and financial planning so they can understand and learn the balance between desires and possibilities.
This may mean taking only one vacation per year, but on the bright side, those memories will be cherished even more. Also, you might have to cut down on your driving expenses, but this doesn’t have to mean going on foot. There’s the option of car share in Sydney that use a car for your needs without worrying about the upkeep, which is very convenient if you don’t need to drive every day.
Increase your income
Child support payments aren’t always enough or reliable, so don’t see them as the main source of income. View them rather as a bonus and put that money into your emergency fund or savings account, and use it to cover your debts or give your children an occasional treat.
Statistically speaking, single moms are poor so do your best to make your professional decisions with a mindset of a successful, well-off person. Put in more work hours at the office if you can, go for that raise or get the advanced degree that will qualify you for a better position in future. Taking risks is scary but if you don’t do it and invest in yourself, there will be no progress.
Pay off your debts
An important part of a secure financial situation is being debt-free. Naturally, you will have loads of expenses, from utility bills, car payments, home mortgage, electronics, and clothes to student loans. Evaluate your situation and do your best to pay off your debts. The less you owe, the easier it will be for you to build your life and achieve your goals.
Take advantage of government benefits
Don’t hesitate to use all the help you can get. The government offers various methods of support for single-parent families. Contact your local council to find out what benefits you’re eligible for as there are a lot of influential factors – your age, your children’s age and your current assets and income.
Some government-funded single-parent financial support benefits include parenting payments, family tax benefits, child-care benefits, legal services, and many more.
Protect yourself and your children
Most states mandate you have car insurance, and mortgage lenders insist you buy homeowners insurance. However, as a single mom raising children, you need more security than that. Don’t neglect disability coverage, and most of all, life insurance. It is an additional expense per month but when you think about the gains both for yourself and the kids, it’s worth it.
Life is unpredictable, and if anything happens to you, you’d want to be sure your kids are taken care of, whether it’s by their father, a relative or an appointed guardian. These financial considerations can range from simple expenses such as sports and music lessons to college education, and helping them at adult age to start their family and purchase their first home. As such, you should look into indexed universal life insurance, and pretty much anything else that you can think of to help cover this cost. It’s not fun to think about, we know, but the reality is that if you don’t do it, your kids could end up paying the price for that.
Hopefully, the tips listed here will give you a clearer idea about how to manage your budget successfully as a single mom, but don’t wait! Take action – plan, prioritize and proceed!