On Mother’s Day, what better gift to give all the single moms out there than some cool and trending financial tips to ring in the day. More often than not, it’s single mothers who get things done right, even with the extremely busy lives they lead. That’s precisely why they could benefit from financial tips that could go a long way in making single moms financially superstrong.
Ensure you’re in control of your finances
Being in control of finances is difficult for most people, let alone single moms. In a society where a large percentage of households have two incomes, it can get very tough for a single mother to make things work on a single income. With two incomes, there is a safety net even if one income stops for a while.
But single mothers don’t have the luxury of having this safety net. They are responsible for bringing in the entire income for their families. This means, as a single mother, you need to be more careful about your expenses. The most important thing to do is to set budgets. This way, you create boundaries for what you can and cannot do.
For example, you may want to go out with your friends often. But are you able to afford it? That doesn’t mean you should never go out and socialize. You simply have to know when to do it and when not to. There’s no shame in admitting that you cannot afford a particular expense rather than living on borrowed money. Instead of heading out to an expensive dinner, communicate to your people that you would much rather meet up over coffee or a potluck. There just might be others like you who are in the same boat but are too afraid to be open about it
Everyone needs a community around them
No person is an island. All of us need support systems to help us get through tough situations. This normally includes our families and close friends. For a single mother, having a solid support system can be of great help. They can help you babysit, house sit, or even get you essentials, furniture, clothes, etc., on the cheap. By telling them what would help you get a better handle on your finances, they will be able to find the right resources for you. Now, this is one of those financial tips that is sure to score a home run for single moms.
Segregate your wants and needs
Budgeting is a crucial part of practicing financial responsibility. Creating a budget will help you stick to your financial goals and show you what you can afford and what you cannot. The biggest way to curb spending is to segregate your needs from your wants. There are budgeting strategies that can help you with this too.
A popularly followed budgeting method is the 50/30/20 rule. In this, you set aside 50% of your after-tax income for your needs, 30% of it for your wants, and 20% to repay debts and to put into savings. There are websites that can help you budget your income and expenses too.
While creating a budget, whether online or on your own, the most important thing to remember is to be completely honest about your expenses. Make sure you disclose every single expense you have, otherwise the budget will not work efficiently.
Your needs usually involve housing payments, utilities, food and groceries, transport, etc. Anything more than your needs will form your wants. This usually includes holidays and travel, buying a new car or gadget, dining out, etc.
Sometimes, you may need more to sustain your needs or to pay off loans. In such cases, the key to balancing your budget is to take the extra money you need from another category. For example, if you need more to repay debt, take it out of your “wants” budget.
Repay debt at the earliest
Debt is perhaps the one form of financial commitment that can hold you prisoner till your last breath, especially if your interest rate is high. The way to gain financial freedom is to ensure you pay off your debt as soon as possible. Put as much of your money as possible towards eliminating debt a little every month.
One of the biggest debt traps around the world is credit card debt. People tend to max out their cards and then have insufficient money at the end of the month to clear their bills. Credit cards are very useful for building credit. But they also charge extremely high-interest rates on unpaid bills. So if you’re using credit cards, make sure you use them to pay only for purchases you can pay off in full when you get the bill.
Create an emergency fund
Saving up for the future is one thing. But most people don’t know the importance of creating an emergency fund. An emergency fund can help bail you out of tough financial situations that can come up without warning.
For example, you never know when you may need a large amount to pay for medical expenses. Or you may lose your job without warning. As a single mother on a single income, this is where the extra funds can be of immense help. Start small and work towards accumulating at least 6 to 10 months’ worth of expenses saved up.
Get insurance plans for your kids
Being a mother is, after all, about the kids too. Get the best insurance plans you can afford for your kids. This includes policies for dental, medical, vision, disability and life insurance. You can look at the options available to you at work or even with specialized insurance agents outside of work.
Having a comprehensive insurance policy for your children and yourself is one of the best ways to protect your finances. If something unfortunate does happen, you will not have to break the bank or get into debt to pay off the bills.
Have we covered it all? Now go out there and celebrate Mother’s Day with our budget-friendly tips.