Being a parent myself, I know can always turn to my spouse for our family’s financial needs. But, a single parent doesn’t have this assurance. Parenting is not an easy job to do, especially if you are a single parent. As a sole bread earner of the household, meeting day to day expenses on one person’s salary can be challenging in today’s inflationary times. Right from paying for the kid’s school fees and health-check up’s to bill payments and household repairs, single moms and dads have to squeeze every penny for its worth.
Pulling a few strings on your purse may seem the ideal way to deal with your finances. But you could follow these effective yet simple ways to manage money better without cutting corners. Here are 6 tips to make the most of your money and ensure a bright, secured future for your children.
1. Plan a Budget
The golden rule of a good financial planning is to create a budget. The first step would be to list down all your inflows and outflows. Once you have done this, you could segregate your expenses into the most important, less important and not-so-important groups. For example, you may want to postpone a holiday tripin lieu of paying fees for the new school term. By doing this exercise, you would automatically get an overview on where the money is likely to drain the most, and at what intervals you need to arrange for the additional liquidity. It is also advisable to try and stick to your budget, so that you can evaluate it at regular intervals and modify it, if at all the need arises.
2. Invest in an Insurance & Healthcare Policy
Life can throw unexpected twists, and if you are well-prepared you can take them in your stride. Just the way, you are currently braving the situation of being a lone parent. An insurance or a health-care policy premium may look like an unaffordable expense right now, but it can reap you appropriate financial benefits in the long run. Such a policy would ensure that there is enough money available for your child’s upbringing and meet his basic expensesin the event of your death, or any other unpleasant circumstances. It would also be a good idea to inquire about the life and health insurance benefits from your employer or also if there are any single parent support schemes available.
3. Set up an Emergency Fund
I understand that given the hardships of single parenting and never ending battle of expenses, setting up an emergency fund may be too much to ask from you. But, a rainy day corpus would not only help you shell out money to meet sudden or unforeseen outlays, but also act as the best safety provision for your child’s well-being. Now, you may wonder what is the right amount to put in an emergency fund? The money experts say that you should aim at ear – marking your 3 to 6 months of your net income post tax.
4. Try to Avoid the Debt-Trap
There may arise a situation, when you are facing a severe financial crunch and you may be tempted to borrow money from banks or even your relatives. But, no matter, how gloomy your financial picture may look, it is advisable to avoid taking on debt. You may rather want to cut down further on your other expenses, even it means even a tighter reign on your budget. Also, do try to find the alternative means of raising money like working a few hours extra in your office for an overtime allowance, putting unwanted items for sale or securing a weekend vocation, in addition to your regular job.
5. Teach Your Child to be Money Savvy Too
Saying‘no’ to your child’s demands may take you on a guilt trip occasionally. But, hold on, there is no reason to tag yourself as a bad parent. Perhaps, you may have underestimated your child’s maturity. If you can sensitize your child on your financial limitations and priorities as a single parent family, it can make the going easier for you. Also, you may encourage him to be responsible with money from an early age, so that he also knows how and when to spend on his needs.
6. Be Frugal, Be Smart, Be Wise
As a single parent, you would perhaps have the best lessons on frugality in your parenting book. But, still if you are looking for smart and wiser ways to reduce your expenses, here are some useful tricks.
Keeping a list handy, while shopping for grocery or a new wardrobe, so that you don’t splurge.
Comparing the best and cheapest deals available on your purchases.
Making the most out of discounts, coupons, sales and second-hand stores.
Taking a membership from a book library or a DVD rental store.
Staying in budget friendly hotels or dine in inexpensive restaurants during the holiday trips.
In case you are seeking more money advice, and that too from a seasoned single parent, then I recommend buying a copy of the book Head of Household: Money Management for Single Parents by Kara Stefan.
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