Being a single parent is hard enough without worrying about budgeting your money.
Juggling work, kids, and a household can be challenging – but it doesn’t have to be problematic when it comes to money. With the right tools, you can easily create and stick to a budget that works for your family.
Single moms need to have their finances in order. That’s why it’s a must to start budgeting today – so you can have peace of mind for the future. It won’t be easy, but you can do the hard things with these fifteen steps.
Why Do You Need to Budget as a Single Mom?
Budgeting is essential for anyone, but it’s crucial for single mothers. When you’re the only one bringing in money, you must be extra careful with your spending as the whole financial burden of your family falls on you. A budget can help ensure you spend your money on the things most important to you and your family.
Keeping track of child support, mortgage payments, student loans, and utility bills is important for one “mama brain.” You need a tool to help you manage those monthly expenses.
How To Budget As A Single Mom
Catch Up On Overdue Bills
Playing catch-up is the first thing (and most important step) in budgeting for single moms. You can’t budget appropriately until all of your overdue bills are caught up. That will give you a fresh start and help you get organized.
Catching up on bills needs to be done quickly. That means finding the money someplace. Whether having a garage sale, spending freeze, or picking up an odd job, getting current is a high priority.
Evaluate Your Finances
As the head of the household, your sole purpose is to balance the finances. You must get your head out of the sand and know your numbers to make that happen.
Determine what you owe and your network. That will help you understand your financial situation and give you a starting point for budgeting.
Start going through all bank records and credit card statements to know what and how you’re spending your money. Knowing is half the battle.
You need to know where your money is going before saving any of it. Track your monthly spending (or less) to understand where your money goes.
Once you understand your spending patterns, you can create a budget that works for you.
Make a Monthly Budget
The first step to budgeting is creating a realistic budget. I can’t stress the importance of having a budget for single moms. Because it’s all falling on your shoulders, there’s nobody else to count on or blame.
Create a simple spending plan to start. Pay for the four walls first (housing, electricity, food, heat, and car expenses). Then, add the other pieces like loans, obligations like child care, debts, and entertainment.
Cut Unnecessary Expenses
After you have a budget, it’s time to cut unnecessary expenses. Finding areas where you can save to put more money toward your family’s needs is essential. Trimming your spending may mean giving up your daily latte or canceling your gym membership.
Cutting back is challenging if you are trying to make ends meet and already don’t have much money. It might require some creativity.
Cutting out cable is a big money saver. Cable TV used to be cheap, but the price has increased and is no longer worth the entertainment value.
Visible is a fraction of the cost of Verizon, yet uses the same Verizon towers. Looking into other cell phone providers to reduce phone costs would be best.
If you haven’t already, ditch the landline and add a primary cell phone line to your plan that sits on the counter in the kitchen.
The food budget is one of the most significant variable expenses you can trim. Learn how to cut down your grocery shopping spending by shopping the sales and meal planning.
Build an Emergency Fund
One of the most important parts of budgeting is creating an emergency fund. An emergency fund is the best way to help you cover unexpected costs, like a car repair or medical bill, without going into debt. Aim to save at least $500 to cushion for unforeseen expenses.
An emergency fund will not only save you from building debt, but it will also give you peace of mind. As mamas, we don’t need anything else to stress over. Emergency savings will be a lifesaver.
Make a Debt Repayment Plan
If you have any debt, creating a plan to pay it off and eliminating the credit card bills that keep you awake at night is essential.
Start by making a list of all your debts and their interest rates. Then, use the debt snowball method to pay off the smallest debts.
This way, you gather momentum and that feeling of accomplishment as you see those debts crossed off the list.
Commit to staying very far away from consumer debt, specifically credit cards. Choose only to purchase anything if you have the money saved to do so.
Look for decent health insurance, too. The less you have of going into debt because of medical bills, the better.
Review Your Budget Regularly
Your budget should be a living document that you review and update regularly. As your income or expenses change, you may need to adjust your budget accordingly.
Periodically reviewing your budget will help you stay on track and ensure your finances are on track.
Your budget should get some love at least once a month. But also, consider checking your online bank account daily to monitor charges and ensure bills have cleared and your cushion is still intact.
Set Money Goals
Please write down your goals and review them regularly to keep on track.
Start a Savings Account
As a single mother, a savings account is a great way to save for your family’s future. You can set up a direct deposit from your paycheck, so you automatically save each month.
Or, you can make manual deposits into your account when you have extra money. Every little bit helps.
You could use this savings account for a specific purpose, like a down payment on a home or a new car. It could also be a “just in case” account that serves a different purpose than an emergency fund.
It doesn’t have to be a lot of money, just any extra cash you come across. It could be just a few dollars at the end of the month.
Remember to plan life insurance into the budget while your children are young. You want to ensure they are cared for if anything ever happens to you.
Consider Sinking Funds
A sinking fund is a designated account that you save for specific expenses. The sinking fund could be a vacation fund, a holiday gift fund, or an emergency fund.
Sinking funds can help you save money and reach your financial goals.
Sinking funds are just mini savings accounts for things you know are coming—for example, Christmas.
If you know you want to have $2,000 for Christmas and there are 12 months in the year, then you need to save $167 per month or $83.50 per pay period to reach your goal.
You could keep sinking funds in a savings account or cash at home.
It can be tempting to overspend when you have extra money in your budget. But it’s important to stay disciplined and stick to your budget. Put it towards your debt repayment plan or savings goals when you have extra money.
Remember who’s counting on you and why you’re budgeting your money. Feel proud of what you’ve accomplished and where you’re headed.
Continue to motivate yourself by learning about financial literacy and seeking expert financial advice.
One of the best ways to stay on budget is to automate your finances. You can set up automatic payments for your bills and deposit your paycheck into your savings account.
Automating your finances will help you stay on track and reach your financial goals.
I adore automating all our finances, including saving and bill paying. I even went on the budget plan for our electricity to have the same amount taken out of our monthly checking account.
Remember to keep track of due dates so you’re ready for the payments from your checking account.
Invest In A Retirement Plan
It’s also important to save for your retirement. If your employer offers a 401(k) match, ensure you contribute enough to get the entire match. If not, open an IRA and start saving as much as possible. The sooner you save, the more time your money will have to grow.
However, if you’re struggling to make it all work, don’t hesitate to pause this to get things set right.
Set a pause date and a resume date to ensure you aren’t waking up at 62 and forgetting to invest in your retirement.
Make More Money
Making more money might look like a lot of things. It could mean starting a side hustle you can do in the evening while your kid sleeps, asking for a raise at work, or finding a better job.
If you’ve been at your job for a while (and do it well), ask for a raise. There are also many opportunities within a company for advancements in other departments.
A side hustle is quite the buzzword phrase these days. But it’s popular because it can help. Imagine what an extra $100 a week could do for your money management and goals! Teaching English online, virtual assistant work or customer service can help you make more money.
Embrace Being Frugal
One of the best ways to save money is to be frugal. That doesn’t mean you have to live a life of deprivation. Instead, it means finding creative ways to save money on everyday expenses.
For example, you can cook at home instead of eating out or shop at thrift stores for clothes. Look for free or cheap fun things to do with your kids.
Check out free days at museums and visit the local library often. Teaching your children to live within their means is one of the most important things you can teach them.
That means learning to be frugal. Making small changes in your spending is a good idea.
Final Thoughts On Budgeting For Single Moms
Budgeting for single moms can be tricky, and there are unique financial challenges that you can face, but the good news is that you can make it work with a little effort. Consider using sinking funds to help you save money for specific expenses, automate your finances to stay on track, and invest in your retirement.
You can also make more money by starting a side hustle or asking for a raise at work. Embrace being frugal by cooking at home and shopping at thrift stores.
Budgeting for single moms doesn’t have to be overwhelming with these tips. Managing all the money management is hard work, but setting up a plan and following it will make that job more manageable.