How to Budget as a Single Parent
Thursday, April 18, 2019, 6:00 AM | Leave Comment
Raising a child on your own can come with many challenges, particularly in the financial space.
However, working with one income is definitely possible and there are ways to budget and provide for you and your child in this circumstance.
Here are five ways to help you budget as a single parent.
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Create a budget
The first thing you should do when trying to manage your finances as a single parent is to actually create a budget. You can use a spreadsheet or an online budgeting service like Mint to help you see how much you’re spending and saving each month. If you’re newly single, this budget may look a little different than previous ones—that’s OK. In your budget, make line items for categorical expenses and income. For example, food, rent/mortgage payments, utilities, entertainment expenses, and other bills should all get their own line item, as well as any income or bonuses that you receive each month.
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Check your bank accounts weekly
If you’re not in the habit of checking your savings and checking accounts on a regular basis, try to make time at least once a week (or every couple of weeks, depending on how busy you are) to see what your accounts look like. By keeping a close eye on your accounts, you’ll be able to determine if you’re spending too much on items that aren’t necessities.
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Pay off remaining debts
When you pay off your debts, you’ll have extra money on hand to spend on items that you actually need and you won’t have to pay any more monthly interest payments. Do you have student loans that have stuck with you for years? What about a car loan? How does your credit card balance look? Look at these areas and see how much debt you have left to pay off. See where you have money in your budget to allocate towards paying off these debts and prioritize paying off the lump sum before investing in any other big purchase.
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Save on monthly bills
One way to find room in your budget is by saving on monthly bills. Take a look at your water bill, energy bill, and other major utilities.
According to House Method, here are a few ways to save on these bills each month:
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Water bill
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Take shorter showers and avoid taking baths every night.
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Turn the water off when you’re brushing your teeth.
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Run the dishwasher and clothes washer when you have full loads.
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Energy bill
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Turn off all lights when you leave the house.
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Turn up the temperature on your thermostat when you leave the house. The recommended level is TKTK degrees.
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Switch out traditional, incandescent bulbs for LEDs.
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Set financial goals
Once you’ve created a budget, take some time to sit down and think about where you want to be in six months, a year, and five years. What do you want to accomplish in that time? Perhaps you want to buy a new car—to do this, you should be putting a good sum of money away each month, especially if you’re trying to pay for the car in cash. Are you thinking about moving from an apartment to a house? To avoid paying private mortgage insurance, you’ll need at least a 20% down payment. That’s $30,000 on a $150,000 home. Reaching your financial goals is possible—you’ll just have to start saving now and see where you could be cutting down on other costs to reach these goals.
