Financial Tips for Single Moms

As a single mom, most or all of the responsibility falls on you. This can mean that you feel like you don’t have time to even think about finances beyond keeping your head above water. However, taking the time to sit down and create a financial plan can give you a framework for making better decisions and offer more security for you and your child.

Make a Budget

The process of making a budget can seem frustrating if you already feel like you’re barely making ends meet, but this is actually a great first step toward getting a better handle on your money and how you can make it go further. Whatever your financial situation, a budget can help you see where you can spend less and save as well as where you might be able to give yourself a little more leeway in spending.

There are apps that can make budgeting easier and help with good money role modeling too, not to mention make the process more automatic for you. As part of this process, you may also want to consider automating as many of your payments as possible. With every else that you have going on as a single parent, it can be easy for due dates to slip your mind, and then you end up with interest or a late charge that could have been avoided.

Keeping savings and salary accounts separate

When managing your finances, it’s important to keep savings and salary accounts separate. This practice can help you maintain clarity and ensure that you are effectively saving money for emergencies, future goals, and your child’s future. By separating these accounts, you can track your spending and savings more efficiently, making it easier for you to stay within your budget and avoid unnecessary debt. 

Get Insurance

Health care insurance costs can be so high that any other type of insurance might seem like an unaffordable luxury, but life insurance can be important in protecting your child’s future. It can replace your income in the event that anything happens to you. If it helps, you can look on life insurance as an investment, which some types of policies are. If have a policy that you no longer need or you are in need of money, you may be able to sell it as part of a life settlement. There are third party buyers that will pay you cash for your policy. You can review a guide on everything you need to know about this process.

Create an Emergency Fund

An emergency fund is another one of the crucial elements for financial security. This helps ensure that if you have an out-of-pocket health care expense, you have to take the family dog to the vet or your out of warranty car suddenly needs a repair, you have the cushion to cover it. Most recommendations are to have three to six months of expenses in an emergency fund, but you may want even more. However, to start with, even just a few hundred dollars can make a big difference.

Avoid Debt

While you’re building that emergency fund, you also need to avoid debt and pay down any existing debt. This means making an effort to pay more than the minimum amount, aggressively working to get any debts besides a mortgage to zero. Using credit cards isn’t automatically a bad thing if you get valuable perks from doing so, but you should pay off the balance every single month so that you don’t accumulate interest, and you should never charge more on them than you will be able to cover at the end of the month.