As a single parent, saving for the future can feel both daunting and invigorating. You get to control your destiny but the pressure of managing your finances alone can feel overwhelming. Build smart strategies into your future to help you minimize stress and save well:
Develop a budgeting process
Being single gives you the chance to make decisions about your financial goals without having to adjust for another person’s opinion. Our best advice? Find what works for you— especially if you are new to this responsibility. Use a budgeting app or create a monthly expense chart that includes fixed, variable and one-time annual costs. The more thorough your accounting, the better you’ll become at avoiding surprises.
Create a schedule to pay your bills
Allocate your resources accordingly based on when you get paid. Set aside income from each paycheck for your biggest expenses (rent or mortgage) to make the first of the month less daunting. Avoid missed payments by balancing the rest of your expenses evenly throughout the month.
Don’t overestimate your income
It can be difficult to go from two incomes to one, but a good way to stay ahead is to estimate your guaranteed income conservatively. Freelance projects, hourly employment income and, in many cases, child support will fluctuate. In fact, according to the government’s Custodial Mothers and Fathers and Their Child Support report, the average amount of child support due per year is $5,774 but the average amount received is $3,950. If additional money comes in that month, you will have more to put into savings or help you pay down debt.
Be a smart spender
Achieve your long-term savings goals more successfully by paying attention to how each dollar is spent. Cut expenses by analyzing categories such as food, entertainment, phone services, insurance premiums and miscellaneous indulgences. Kelly Albiston, senior vice president of digital banking at Mountain America Credit Union says, “Make saving easy and spending noisy and difficult. Automate your saving behaviors, and do them immediately as you are paid. For spending, set up text and email alerts each time money is spent. This will help you feel the gravity of the purchase instead of swiping your card and forgetting it happened.”
Plan for emergencies
Don’t let your child’s camp registration fees, car repairs or unforeseen medical expenses derail your financial plan. Secure your future and that of your little ones by setting up an account specifically for these events.
Our final tip? Partner with a great financial institution, like Mountain America, to lower your interest costs and help you grow your savings and investments.