How to budget as a single mom
To some single moms this may seem impossible. Budgeting may seem like a foreign concept. How do you budget, when you can’t even pay your bills? Depending on where you are currently, this may be a process, but you can improve your situation with time and dedication.
Your finances are nobody’s business, but your own. For some reason, many people assume that just because you’re single, you don’t deserve privacy. If you feel comfortable sharing your financial information with someone, go for it! But don’t share with anyone unless you’re comfortable with it.
Setting up your budget
Write out every source of income that you have. Include income from your job, regular child support, alimony, money from side jobs and any other income you receive.
List your income
Add up every source of income for this step. You will want to include any money received: wages, salary, tips, unemployment, social security, etc. Basically anything that helps you pay the bills.
Does child support count as income?
Officially, child support receive would be considered income. If you currently rely on child support, you may want to count it in your budget at first. Eventually, you should try to get to the point where you don’t count any child support received in your budget.
I’ve seen too many single moms rely on that payment each month and then if they happen to have a period of time where they don’t receive it, they (understandably) panic! That chest tightening, end of the world feeling is real and it’s scary!
If you do receive regular child support- wonderful! But if you are able to get to the point where you don’t rely on it, you’ll be much better off.
List your debts
Next, write down a list of every debt, bill, or item that you pay for regularly. Including the due date, monthly payment, balance, and interest percentage. You will also want to write out any occasional bills or payments in a separate column.
The only way to see what you are realistically paying out is to be completely honest with yourself about where your money is going.
What is your debt to income ratio?
Your debt to income ratio compares what you owe each month to your income. To figure this out, add up all of your income and then add up all of your regular bills. Next, you will divide your total debts by your income. This percentage is your debt to income ratio.
Example: $700 bills/$2,000 income= .35 = 35% debt to income ratio
If you apply for a mortgage or any type of loan, lenders will look at your debt to income ratio. The lower it is, the better chance you have of receiving the loan.
More importantly, the lower your debt to income ratio, the easier it will be to live comfortably and be less stressed due to financial issues.
Are there any debts you can cut
Look closely at your bills. Can you cut out any expenses? Or is there any way to lower any of your bills? Even if you don’t think there’s any way to lower a necessary bill, call and ask. Sometimes you’ll be surprised. Some creditors are willing to lower interest rates or even help you with payment plans.
Be creative. If you can’t figure out what you can change, talk to someone you trust and see if they see anything you can change in your budget. Sometimes it takes a fresh set of eyes to notice small changes that can be made.
Monitor your expenses
It’s so important to track your spending. Sometimes you might think that you’re only spending $20/month on fast food, but if you really wrote down every penny you spend, it might end up being $50 or more. During the first month, write down every single thing that you purchase or spend money on. This can really help you see what your expenses are daily. After you track your spending for at least a month, revisit your budget to see if you need to make any changes.
Pay your most important bills first. Usually the top priorities will be food and housing. After paying these check to see which other things you can’t live without. If you qualify for food assistance, this will help greatly and you can put your money towards other necessities.
What do you prioritize next? For me, I consider my car a top priority because in my area, it would take me several hours per day to get to and from work on public transportation. Depending on where you live, public transportation might be easier and cheaper.
Look at your utilities. Power and gas are a necessity, but can you do anything to lower your bills? Can you turn your heat down just a little?
Look at your internet and cable bills. With kids in school or internet needed for any work you may do at home, you may not be able to cancel that. Plus, if you qualify, some internet providers offer inexpensive plans based on your income. Can you get by without cable? We have Netflix, but cancelled any other TV services. There are also kids shows that can be found on PBSkids.com and other sites. .
These are some areas you will want to look at in your budget:
- Other debts
You can’t have everything. Cut out anything you absolutely don’t need.
Do you need to bring in more income?
Often, the issue for single parents isn’t actually that they are spending too much. It is more often that they aren’t bringing in enough money to pay for the basic necessities for their family. If this is the case for you, you will need to figure out how to bring in enough money to support your family.
I understand how tough it is when you need to make more money to pay the bills, but you don’t have the time for a second job. It may not be ideal (or may even feel impossible), but sometimes, we just need to do it.
Figure out what you need to do to support your family short-term. What can you do to support them long-term? Does this involve going to school, or going through a training that will help increase your income?
I don’t advocate staying on welfare. Do everything you can to be self-sufficient, but if you need a little help, look into programs that are out there. They are available to use temporarily, as a way to help you with necessities.
You may need to apply for child care assistance or food stamps while you’re working through an entry level position at work. Or you might need some assistance while completing your education or training program. If it’s the difference between your kids having a meal or them going hungry until they go to school, make sure you do take advantage of available options until you are able to support your family on your own.
Don’t hold yourself back
It is very common for people to hold themselves back from making more money (subconsciously or not). Whether you need to work on your money mindset and you don’t feel like you deserve to (or aren’t capable) make a higher income.
Or maybe you’re holding yourself back so that you don’t lose out on benefits. You need to know that you are worth it. There probably will be some tough times while you work through those periods where you don’t quite qualify for financial support, but you also can’t pay your bills.
Have the courage to push past those fears and look at your situation long-term. Figure out what you can do to eventually provide for your family on your own.
Go back to school
Is it an option to go back to school? If so, take advantage of student housing and onsite daycare. As a single parent, you will most likely qualify for financial aid or scholarships. It will take time to research, but may be well worth it.
Make tough decisions. It might be hard- it may be one of the most difficult things you’ve done in your life. You most likely need make some big changes in your life, but you can do it. You might need to sell your house. You might need to give up your life of stay at home mom. You might need to sell some of your stuff to survive. Do what you need to do while you’re working on a long term plan.
Build an Emergency fund
I understand that not all of us are quite to the point where we can work on our emergency fund. There’s not much point in putting the money in savings only to take it out every single month to pay the bills. Eventually though, you will want to get to the point that you are able to work on savings.
Sometimes being a single mom means utilizing your lunch break to run errands. Or spending nap time cleaning the house or finishing projects.
Stick to your budget
Once you set your budget and figure out your financial goals, stick to your budget. Remember what you are trying to achieve for your family and keep going. Your situation may not be ideal, but there may be some changes that need to be made temporarily to improve your long term situation.
What are some things that have worked for you while budgeting as a single parent?
**This post is the first of a 7 month Single Moms 101 series “Secrets of a Successful Life” by Single Mom Bloggers that I am working on with a few other single mom bloggers. We will each be writing monthly about topics that affect single moms directly.
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