When you become the sole head of a household, all the financial duties suddenly fall on your shoulders. Unsure how to budget as a single parent? Follow our tips to manage your money, plan and create a single parent budget.
Determine your cash flow. It may have changed since you can no longer include your ex’s income.
Factor in child support. If you receive child support, add it to your cash flow. Also, remember to separate any accounts you shared with your ex, such as bank accounts or personal loans
Evaluate your debt. Write down all your debt, including mortgages and car loans. Address any obligations you have with your ex. For instance, if you share a credit card, you should each transfer your agreed-upon balance to your cards.
Create a debt payment plan. Even if your income level has decreased with your new single parent finances, you can still pay off debt. You just need a proven strategy. Try using the debt snowball or debt avalanche methods to whittle down what you owe methodically.
Budget for your expenses, including your children’s expenses. Include everything from significant costs, like monthly utilities, to minor expenses, like paying for school lunch. Listing out budgeting categories, such as “extracurriculars” for your kids’ soccer team expenses or piano lesson bills, will help you avoid surprises.
Consider various budgeting methods. If you have never created a monthly budget, use a system like the 50/30/20 rule or cash envelope budgeting for guidance.
Set financial goals. You may want to return to school, look for a higher-paying job, or find a new home. Write down your goals and the steps you must take to achieve them.
Search for ways to cut costs and save.
Food is one area ripe for savings. Meal prep each week, use up items in your pantry, and clip coupons. Other great ways to cut expenses include: /blog/articles/how-to-afford-having-a-stay-at-home-parent/
Buying clothes from thrift stores (tell your kids they’re vintage!)
Skipping Starbucks and brew your coffee at home.
Using credit cards with rewards for purchases.
Transferring high-interest credit card debt.
Evaluate your budget as needed. Remember, budgeting is a balancing act. You may need to rebalance from time to time as life circumstances change. You may get a raise, or your child may go to college. Remember to treat yourself occasionally, too.
Create a savings plan. Single parents should prepare for the unexpected. Create an emergency fund and contribute to it monthly.
Set up digital banking. In addition to being convenient, digital banking can save you money on late fees by automating your monthly bill payments.
Want additional assistance with your single parent budget? Our Members 1st MyConcierge™ service provides personalized guidance on everything from how to grow your nest egg to borrowing wisely. We also have savings accounts you can use to build long-term goals.