As a single parent, you have a lot of responsibility resting on your shoulders. You’re in charge and no one else can decide the best way to budget your money or how to create a solid financial plan. This financial weight can be pretty overwhelming. After all, you have to determine how to build up your savings account or pay off debt as the sole head of your household.
If you could use a little help in the budgeting department, we have some financial advice for single moms and dads to help you make the most out of your income and plan for the future.
Monthly Budget for Single Moms and Dads
A single-mom budget (or single-dad budget) might include additional side income in the form of child support, but those extra payments don’t always cover all of your expenses. It’s crucial to track your spending habits so you can get a better holistic idea of your financial circumstances.
We get it — if money is tight, it can be a little scary checking on the number in your bank account. But if you’re newly single and accustomed to two incomes, your budget will look much different from ones in the past and it’s important to actively manage your bank accounts.
Some, if not all, expenses are likely different and so is the total household income. Even if you’ve been single for a while and you’re just getting your finances in order, there still may be some surprises you haven’t anticipated.
Everything is your responsibility now, so all services, products, and monthly financial obligations should be accounted for as real and tangible expenses. Maybe you’ve already considered your monthly mortgage payments within your budget, but have you thought about adding in the cost of the periodic holiday and birthday presents you buy every year? With those additional expenditures in mind, try to account for anything, so you can adequately prepare for everything.
Financial Planning for Single Parents: Keep Track of Accounts
One of our most effective budgeting tips for single Moms and Dads is to stay on top of your accounts. You should monitor your checking and savings accounts for fraud and incorrect charges. In addition, it’s a good idea to keep an eye on your credit accounts such as your mortgage, credit cards, and vehicle loans. Taking these steps help keep you informed and may eliminate overspending. When you know what you have, it’s easier to make smart choices — an essential aspect of a single parents’ finances.
With a budget app like Mint, you can manage all of your accounts from all angles. Monitor upcoming bills, track spending and receive alerts to suspicious activity all through the same platform. Mobile options for your budgeting allows you to take and access that information anywhere you go. Buy ice cream for the kids after soccer practice and check how it affects your budget in real time.
Money-Saving Tips for Single Moms and Dads: Learn About Tax Credits
Many single parents qualify for income-based tax credits for each child. These credits may actually prove more valuable than deductions, which only reduce the amount of your taxable income. Credits reduce the dollar amount of taxes you owe.
Tax tip: If you receive alimony, that’s income according to the IRS; you’ll pay taxes on it. Child support, however, is not taxable, and only one parent can claim a child as a dependent on his or her taxes.
Plan for the Future: Effective Budgeting Tips for Single Moms and Dads
Because everything rests on your shoulders, there’s a lot of planning necessary to secure your future and that of your child. Savings aren’t just important, they’re critical.
Every family, single-parent or otherwise, needs several months’ income in savings in case of an emergency, such as a lost job or long-term illness. You may also want to investigate precautionary financial products like life insurance so your children will have a more secure financial future should anything happen to you.
A solid budget plan can help you discover inefficient spending habits so you can take control and put that money to better use in savings. Even small changes add up monthly, and even more so as years pass.
FAQ: Single Parent Personal Finance
How can a single mom save?
In order to have a strong financial future, it’s important to reserve a portion of your income for your savings in order to prepare for significant expenses such as your children’s college education. The monthly budget for a single mom may be less than a two-parent household but there are still ways to make the most of it.
How much does the average single parent make?
For single-mother families, the median income is $25,493. For single-father families, the median income is $36,471. While these numbers may be difficult to work around considering the growing costs of child care and education, using a budget tracker is one of the best ways to conserve and spend your money.
How can I budget with little income?
You might feel at a disadvantage on a single income, but budgeting can empower you with the knowledge you need to meet both long-term and short-term financial goals. Paying off your credit card, watching for patterns in your spending habits, and preparing for your financial future is all within the realm of possibilities. Even if you don’t have much wiggle room in your budget, the ability to see the amount of money going in and out can help determine your next financial steps.
How can I be a good single mom or dad?
Hey, if you’re asking this question — you’re already a good mom or dad. There’s a lot more to being a single mother or father than just taking care of your children’s basic needs. You have to get them to soccer practice, financially prepare for their future, and get dinner on the table. But for your kids, you’re their hero already. Figuring out a monthly budget as a single parent isn’t always easy, but it’s one step in the right direction.