When you’re a single mom, you’re not just the sole provider of emotional support and care, but you’re also your kids’ financial support, too. This can be incredibly tough, especially when you’re trying to juggle all of these things.
However, there are many ways you can effectively manage your finances, and we’ve detailed these below:
Spend Your Money Wisely
One of the most fundamental parts of managing your finances is creating a budget so you only spend what you need to. It’s so easy to buy nice things, but keeping track of what you’re spending will help make sure you spend within your means.
Be wary of loans and credit cards because it’s very easy to get carried away when using plastic to make purchases. Because you aren’t physically seeing the money you’re spending, you might not realize just how much debt you’re accumulating.
Assess Your Financial Position
The next step is to assess where you are financially. Look at where you are with your savings, how much you’re putting away each month, and what debts (if any) you have. It can be a daunting prospect to calculate outstanding debts, but being aware of what needs paying back will help you get your finances in order.
For example, if you’ve got some outstanding loans, it may be with consolidating these so they’re easier to manage. There are a number of companies who can help you with this (find out more on Money Beagle).
Create a Financial Safety Net
As a single mom, it can be incredibly difficult to invest money or save regularly. Because after you’ve paid all your bills and treated the kids to a day out, there’s very little left. However, it’s vital you try and put together an emergency fund. This will provide you with that all-important safety net in case the worst does happen.
Even though you won’t want to think about worst-case scenarios, it makes financial sense to be prepared. Experts often suggest you should have three to six months’ worth of your monthly expenses saved up, just in case suggests Investopedia. This can help cover the loss of earnings in an accident, emergency repairs to your home, etc.
However, don’t be intimidated by this large amount if you’re starting out with your emergency fund. The key is putting aside as much as possible each month without making things difficult for yourself. Set up a savings account you can put this money into and put as much as you like into it each month. You may be surprised just how much there is when you check it at the end of the year!
Get Life Insurance
Life insurance is important for any parent, but it’s even more crucial when you’re a single mom. You need to have a plan if something happens to you, opting for trauma insurance or income protection, which will help protect your family in the worst possible circumstance.
Putting these simple steps in place can create a strong financial future for you and your kids.