5 Financial Tips for Single Parents
According to statistics, single parents face numerous complications with personal finance. Approximately 13 million households within the United States consist of one parent. A balanced financial strategy must be developed and followed in order to meet the financial and the emotional-based demands associated with such households. Unfortunately, most single parents face a wide array of challenges and strains that may not exist for households that include two parents. Individuals that are raising their children alone face many unique and complicated challenges when it comes to budgeting household funds. While children offer any household a large amount of joy, it is a known fact that it is not inexpensive to raise a child. According to a release from the Department of Agriculture, it is estimated that from the day that a child is born until the day that they become legal adults, it costs approximately $250,000.00 to raise them. As a result of this fact, many single parents find themselves running on nothing more than financial fumes in the area of personal finance. In this comprehensive guide, you will be introduced to 5 financial tips that are specifically tailored to assist parents that find themselves solely responsible for raising their children.
Create a Budget to Control Spending
The single most important step that single parents may take when it comes to personal finance is creating a budget that will assist in the control of spending. Individuals that are raising children alone often find that they not only carry the entire emotional load of the family, but that they also carry the total financial load. As a result of these overwhelming loads, it is common for single parents to lack financial accountability. A budget will enhance financial accountability. The upside to financial planning through a budget as a single parent is that you will be the one that is directly responsible for establishing a solid financial future for yourself and the children that you are raising. While this is an immense amount of responsibility, you should view it as an opportunity. You are the only person that has the ability to determine the absolute best manner to budget your funds. You are also the only person that has the ability to create a solid personal finance plan for your future. Creating a budget to control spending will allow you to achieve success in these areas.
Emergency Funds Establishment
The next step that single parents should take when it comes to personal finance is establishing designated emergency funds. This is a challenge for couples. It is even more challenging for those that are raising children on their own; however, it is a necessary task. If possible, a certain percentage of your paycheck, a portion of the spousal support payments that you receive, or even a small amount of your child support should be placed into a designated savings account or even a money market account. This may assist you when you face unexpected and/or unforeseen circumstances, such as mechanical issues with your automobile, an unexpected illness, and/or an unforeseen layoff from work.
The next step in personal finance for single parents includes researching and taking advantage of any and all tax breaks. There are several that pertain to children. For example, if your income falls below a pre-determined amount as set forth by the Federal Government, you may qualify for a tax credit of a certain amount (usually around $1,000.00) for each child you are raising independently. Many parents qualify for what is called the “Earned Income Credit”, or, “EIC”. Still, there are other tax breaks pertaining to the self-employed and widowed parents. In addition to this, there are tax credits that pertain to tuition incurred by advancing your education. It is in your best interest to research these tax breaks and determine which you qualify for and then, take full advantage of them.
Drop the Name Brand
As a parent, it is quite likely that your children will develop a personal fondness towards name brand items such as clothing, video games and consoles, toys, and food. If your aim is set on the bull’s eye of saving money, you should learn to drop the name brand and opt for store-brand or off-brand items. You are sure to discover that you are able to save an immense amount of money and that the off-brand labels are just as good as the name brand labels. In some instances, you may even find that the off-labels are better than the named-labels. By taking this step, you will eliminate a lot of pressure and financial strain.
Include the Kids
The next, and final, personal finance step for single parents is to include the kids in on the financial affairs in the home. You should always stress the importance of earning money, saving money, and having solid appreciation for that which you may acquire. By encouraging kids to help you in your efforts to earn money and save money, you will find that they develop a solid appreciation for the almighty dollar. As a result of this appreciation, you are sure to find that the financial strain in your household is drastically reduced. By following all of the personal finance tips for single parents in this guide, you will find that the financial strain of raising children on your own is completely eliminated.