10 Financial Tips for Single Parents

Parents have the hardest job in the world, and those who do it alone truly deserve a medal. An added challenge of single parenting is handling the finances. Living on one income makes budgeting, and saving for your little one's future even more difficult. The good news is that you're not alone and financial freedom is closer than you think. Here are 10 financial tips for single parents.

1. Talk to your kids about money

   If your children are old enough to understand the value of money, then it may be in your best interest to talk to them about it. Airing out the family's financial situation can give kids a better idea of where money comes from and where it goes. Opening this line of communication between you and your kids may foster a better understanding of spending, budgeting, and saving so that they can contribute to the family nest one day.

2. Track your spending

   As a single parent, you have to be even more cautious of your spending and how it impacts your family. Single parents are advised to track their spending by keeping a written or digital ledger of their purchases. Once you know how much you're spending and where it's going, you can better budget your money and start investing wisely.

3. Save on child care

   Child care is expensive, and some single parents simply don't want the added costs. If you're not going to get child care, then you're going to have to make some adjustments to make it work. First, ask family and friends if they can watch your children while you're at work. If this doesn't work, then you may need to change your work schedule, or split the duties with a trusted child care provider to cut the costs in half.

4. Get tax breaks

   Single, working parents who use day care can catch a break with the Child and Dependent Care tax credit. Parents are allowed to deduct up to $3,000 for one child and up to $6,000 for two or more children who were cared for. This tax break is a lifesaver for many single parents who use day care services to help them balance their busy lives.

5. Manage and stay out of debt

   The last thing you need to compound your financial troubles is getting into debt. Living on one income is most certainly tough, but single parents have to make wise financial decisions to avoid falling into debt. If you're already in debt, take care of this problem right away. This may mean taking on another job to pay off your current debt, or resorting to debt consolidation or debt settlement.

   

6. Save for retirement

   Don't forget about yourself! Single parents should continue to save for retirement so they have enough money to live on when they stop working. Even if you're a young parent, it's never too early to start setting money aside for retirement and planning for your future. Parents who live on a limited income are advised to put more money into retirement and emergency funds than in college savings because their children will likely qualify for financial aid and scholarships. There's no such thing for retirees.

7. Save for your kids' college education

   Saving for college is difficult for anyone, especially if you're a single parent. You may not be able to save enough to pay for their entire schooling, but every little bit counts. The earlier you can start setting money aside for college, the more you'll be able to help them out. Depending on your family income, your children may qualify for financial aid, scholarships, and work study programs that make college much more attainable.

8. Find free things to do

   There are plenty of fun activities to do with your children that don't cost a dime. Single parents should partake in free activities like going to the park, attending museums during free hours, camping out in the backyard, and playing board games at home. Not only are these activities cost-effective, but they are fun for the whole family.

9. Live within your means

   Although many Americans do not live within their means, it is crucial for single parents to do so. Living within your means is very doable, but it certainly requires a great deal of discipline. If you can no longer afford your car payments or your mortgage is becoming a major financial burden, then it may be time to downgrade to a less expensive car or move into a more affordable apartment. Just as you teach your children the difference between needs and wants, you have to explore the same question when it comes to living within your means.

10. Create an emergency fund

    Parents know that accidents happen, but not everyone is prepared for the costs that come from these unexpected events. One of the best ways to protect your family from being completely wiped out in an emergency is to create an emergency fund. Although this amount varies from person to person, single parents should try to save as much as they possible can because they are supporting themselves and their children. When creating your emergency fund, consider different emergency scenarios and how much they would cost and give some thought to your job security. But most importantly, don't touch that emergency fund unless it's a real emergency.

    

Taken From Online Degree