In today’s economy, finances are becoming an increasing issue. Inflation goes up and salary adjustments are not keeping up. Young people are struggling to keep up financially, especially parents. Young parents are forced to reduce their spending and learn how to budget for possibly the first time. Divorce rates are also higher than ever, meaning there are more single parents than ever before. It’s not all doom and gloom though, there are a few key skills that single parents can learn to keep the wallet from hurting too much.
Evaluate Your Income and Expenses
The first step in creating a great budget is to evaluate how much money is coming in every month. This includes everything from monthly income from work, freelance work, child support, and spousal support if applicable. A spreadsheet is helpful in keeping track of income and expenses.
Next, we must take into account how much money is going out. Add up all monthly expenses like housing, utilities, groceries, childcare transportation, healthcare, and entertainment. After we get a clear look at our expenses, we can then determine any areas that we are overspending in. For many Americans, things like eating out and video subscription services take up a bulk of our income. Commit to either reducing the amount spent per month or get rid of it completely.
Create A Realistic Budget
We can use the income and expenses assessment to determine a realistic budget. The overall goal is to live as comfortably as possible while saving the most amount of money as possible. Our highest priority in this budget will be necessities such as housing, utilities, and groceries for the family. Allocating funds for investment and emergency expenses will be very useful in the long run.
The next priority will be for fun! Despite popular belief, if your routine is made comfortable by that coffee in the morning, you should get that coffee in the morning. Mental health is going to be important in the long run, so don’t be afraid to spend some money for fun as well. Once a number is determined, try your best to keep to it.
Consider Child Support and Spousal Support
While similar, child support and spousal support are different things entirely. As a single parent, there is a high likelihood that you are receiving one or the other. Child support is a payment that is intended to cover the basic needs of a minor child. These basic needs include:
- Food
- Shelter
- Clothes
- School supplies and other expenses
- Extra-curricular activities such as sports teams and camps
- Books and toys
Usually a bi-weekly or monthly payment, both parents are expected to make payments directly correlated to their monthly income.
Spousal support, otherwise known as alimony, is intended to help one parent maintain their general lifestyle during marriage. The number is based on both spouses’ income and is rarely ever permanent. Be sure to take these amounts into account while setting your budget. If you are unsure if you are eligible for spousal support, contact a spousal support attorney serving Manassas.
Build an Emergency Fund
As a single parent, having an emergency fund is essential for financial stability. An emergency fund is a savings account that is specifically designated for unexpected expenses, such as car repairs, medical bills, or job loss.
Having an emergency fund can provide you with peace of mind knowing that you have a financial safety net to fall back on in times of need. Aim to save at least three to six months’ worth of living expenses in your emergency fund, but start with whatever amount you can afford to set aside each month.
When creating your budget, be sure to allocate a portion of your income to your emergency fund. Treat your emergency fund as a non-negotiable expense, just like your rent or mortgage payment. By prioritizing your emergency fund, you can ensure that you are prepared for any financial challenges that may arise.
Meg is an author at Cinnamon Hollow. She writes on a variety of topics sharing tips and ideas for daily life.
