Budgeting Guide for the Single Parent
Being a parent isn't easy. You must put the needs of someone else before your own when it comes to even the simplest things like what to eat for dinner or what movie you should watch on Netflix tonight.
You want what's best for your children, regardless of your single parent status. Having a good financial plan will ensure you're able to provide for a good future for you and your kids. A couple easy tips can help you get on the right path for a sound financial future.
Track Your Spending With a Budget
This is even more important as a single parent since the finances are all your responsibility. You need to know where your money is going so you can understand your expenses and be able to put money away.
To start your budget, list all the expenses you can count on having each month. This will include items like rent/mortgage, utility bills, food, and child care. You also need to keep track of other expenses you have for things that aren't necessities but happen for special events like birthdays or entertainment. Those type of expenses could be your morning coffee runs to Starbucks or taking your child to the Aquarium over the weekend.
As you start your new budget, you may come across some surprises on where your money is going. You may decide to adjust or find lower cost options which will help you save more money.
Monitor your Accounts
Keeping track of your accounts isn't just limited to your checking/savings. You also need to make sure you're accounting for any loans you have like your house or car and credit cards.
It may seem hard at first to keep track of all these things, but there's software and mobile apps out there that can help you. Many of these applications will allow you to see when your bills are due and your bank accounts without having to sign onto multiple websites.
Maximize your Tax Credits
A single parent like you may qualify for tax credits that aren't available to others. These tax credits are typically income-based and may reduce the amount of your income that can be taxed. This means you can keep more of your hard-earned dollars.
You may want to talk to a tax professional or an accountant to make sure you're getting all the credits you can. There are many rules they can help you navigate through. For instance, only one parent can claim a child as a dependent on his/her taxes.
Create a sound Savings Plan
This is such a critical need for all families. When you're a single parent that means you must bear the financial responsibility for you and your children.
If you find yourself unemployed or must leave your job for personal reasons like taking care of a loved one, you must have an emergency fund. This savings fund must be able to get you through at least six months in case you find yourself in situation where you can't work.
Aside from an emergency savings, you also need to create savings based on your goals. These goals could range from buying a new car, house, or saving money for your child's future education.
Starting with a simple budget to keep track of your expenses, you are well on your way to securing a solid financial future as a single parent. You will be more informed about where your money is going and make changes to your spending habits that will add up over time.