Financial Tips for Single Moms

With your situation, most of, if not all of the responsibility, falls on your shoulders. Oftentimes, that means it may seem like you don’t have the time to even think about finances beyond keeping your head above water. On the other hand, taking the time to be able to sit down and create some sort of financial planning gives you at least a guideline to make better decisions. It also provides further security for you and your child.

Make a Budget

The process of budgeting might make you angry if you feel that you already hardly have ends meet. On the other hand, it is one of the best initial steps that you can make to get a better handle on your money and how you can make it go further. A budget can show you, whatever your financial situation, where you can spend less and save, and where you might be able to give yourself a little more leeway in spending.

There are apps that can make it easier to budget and help with good money role modeling, too, not to mention make the process more automatic for you. In the process, you may also want to automate as many of your payments as possible. With all the other things you do as a single parent, it is easy to have due dates slip your mind and end up having to pay some interest or late charge that could have been avoided.

Keeping savings and salary accounts separate

While managing your finances, keep the savings and salary accounts separate. It will help you keep track of your records and you will know if you are actually saving any money for contingencies, goals, or your child’s future. Segregation of accounts will enable you to properly monitor your expenditure and savings and help you to be more within your budget to avoid all kinds of unnecessary debts.

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, and check online resources that have life insurance beneficiary explained in detail to ensure that you make the right choice.

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.