Single parents face some special challenges, especially when they are the sole earner and financial decision-maker for family. But with careful planning, single parents can have a comfortable financial life and build a happy future.
Create a budget
There are a lot of emotions tied to how and why we spend money, but there are huge payoffs by creating a budget . The first step is to evaluate where money is going, and then decide if those spending habits are working for you.
There are convenient tools and apps available to help you see spending patterns and create a budget to meet your financial goals. Or sit down with your bank account statements and tally up the amount of money you spent on various expenses during the month.
If you find you’re spending too much, look for areas to cut back, like online subscriptions.
Build a safety net
Financial hardship often goes hand in hand with medical bills. Make sure your family is covered by health insurance. If you don’t already have health insurance, and you don’t get it through your employer, go to HealthCare.gov to see your options.
Depending on your income, you might consider signing up your children for free or low-cost children’s health insurance with your state’s Children’s Health Insurance Program (S-CHIP). Check out InsureKidsNow.gov for details.
Save for the future
Once you know your monthly budget and you have a safety net of insurance, it’s time to start saving for your financial goals.
Saving for retirement should remain a priority throughout your earning years. If you have a 401(k) or another tax-advantaged retirement plan at work, you’ll want to save at least enough to qualify for your employer’s matching contribution—that’s “free money” that you would otherwise be leaving on the table.
Being a single parent is not easy, but it can be an empowering journey of growth and personal fulfillment. With careful planning and smart money management, you and your children can have a wonderful life together.