Money and the Single Parent
No question. Pa
renting is hard. And no question the level of difficulty (and stress) ramps up when you are parenting on your own.
In addition to the logistical challenges, the financial burden and obligations are tricky and numerous.
Here are some money tips for single parents:
Know where you stand: Exactly
You need to contemplate and account for every single penny you are spending. Think beyond the obvious- food, shelter, grocery debt payments etc.
Include things like magazines, social spending, kid’s activities (including any school fees, like trips or hot lunches, haircuts, etc.)
Be super detailed. This is all about coming up with an accurate financial picture.
Pay as Much Attention to Saving as Spending
Your margins are likely thin to begin with, but it is important that you set aside some money every month in case of an emergency. It’s no longer an important part of your financial planning; it could be crucial to your financial viability in the long term.
Look at Cash Flow
Once you’ve determined what you’ve got to work with spending-wise, get to work to determine if there are areas that you can shave down.
For example, can you save on childcare by swapping favours with neighbours, friends or other single parents? Are you doing all you can to cut back on grocery and other expenses? How much does your family use cable? Are you carpooling, walking and/or taking public transport wherever possible?
Get Credit Under your Belt
Unfortunately, when many marriages fall apart often one spouse will find that establishing credit on their own two feet is a bit of a challenge. This is especially true if any credit cards held during the marriage were secondary cards on a joint account.
It is imperative to set up your own “financial identity” as soon as possible though. Make a point of getting a credit card, even though it may pose a challenge initially. You may be subject to high interest rates and/or having to secure the debt with an asset, but in using the card and paying it off every month, will have long term credit benefit for you.
A word to the wise- keep the limit low. This is a tool to establish credit- not an avenue to accumulate debt.
When there is a will….
Estate planning and wills are most likely not in your immediate headspace, but when you transfer to single parent status, this step of financial planning is crucial. Make sure you’ve got enough life insurance and that you’ve got a will in place. Wills can be done inexpensively, with some DIY packages that yield good results.