How To Manage Your Single-Parent Finances
Money trouble can hit single parents especially hard. When you’re struggling just to make ends meet, it’s hard to think about proper money management and plan for a secure financial future.
But effective money management may be easier than you think, even for single parents. Here are a few tried and true approaches to managing single-parent finances.
Money Tips For Single Parents
Create A Budget
Making a budget is perhaps the most important money management tool. It’s the key to everything: understanding your spending habits, getting an accurate picture of your savings, figuring out what to cut back on and how exactly to do so.
It’s how you are able to figure out how to live within your means and where you can set long-term financial goals.
There are many ways to create a budget. The first step is outlining all your income and expenses, and further dividing your expenses into needs (rent or a mortgage, food, utilities) and wants (entertainment, travel, eating out).
One popular option is the 50/30/20 budget. Look at your monthly income and commit to this rule: 50% should go to your needs, 30% for your wants, and 20% into a savings account.
Financial advisers also suggest allocating income to common expenses, wants, and needs, in various ways. Generally, they recommend contributing 30% a month to housing, 12% to food, and 5% to paying down debt.
Improve Credit Score And Tackle Debt
Millions of Americans have debt — and a lot of it. A recent Experian study revealed that the average person in the United States has $92,727 in consumer debt tied to their name.
Taking steps to lower your debt should be as much of a priority as creating a budget and starting a savings account. Even if it’s paying off a little chunk at a time, it’s a start.
Some tackle the lowest bills first and go from there while others pay off the highest debt first and then follow up with the rest. Do whatever works best for you and your situation.
Paying down debt and paying your bills on time should dramatically impact your credit score. A credit score often determines a lot: whether you qualify for a certain credit card rate, being able to afford a home, the rates you pay on certain loans, and much more.
Find Affordable Childcare
Childcare costs often take up a huge chunk of a single parent’s income, up to around 40%. The average childcare cost in America is around $9,500. That’s a major expense, likely more than a mortgage, car payment, and a variety of bills combined.
To get back on the right financial track, spend some time thinking about alternatives. If you’re working at home, is it feasible for your child to be at home as well instead of daycare?
Sometimes in-home care, a nanny who comes to the home a certain number of days a week, is often more affordable than daycare center costs.
Friends and family may be able to help now and then. There are also numerous government programs that can offer grants to reduce the cost of childcare, such as Head Start.
Find The Right Insurance
Another large expense for a single parent is insurance for various personal and family needs, including car, health, life, renters, and home insurance. These are vital to have; they protect your and your family’s health and well-being.
Your current rates never have to be permanent. In fact, it often pays off to compare coverage and policy plans every year to ensure you’re getting the best rates.
And don’t forget to consider basic life insurance. It’s the best way to ensure that your dependents will be well taken care of in the future.
Consider Assistance Through A Car Title Loan
For single parents, working to manage their finances more productively, a financial emergency can be a huge setback. An unexpected hospital visit, last-minute but needed travel, and pressing home and car repairs can run in the thousands or even tens of thousands.
A car title loan from Delaware Title Loans, Inc. may provide help. Car title loans use your vehicle’s lien-free title as collateral in exchange for a short-term loan specifically designed to address financial emergencies.
Those who qualify may be able to receive a loan of up to $15,000. It can take as little as 30 minutes to qualify.
Just head to our homepage and fill out the short car title loan inquiry form. From there, one of our loan representatives will give you a quick phone call and guide you through the rest of the easy loan process.
Being a single parent is never easy. We’re here to help. Either start the loan process on our homepage, give us a call, or visit one of our locations near you today.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.