How to Manage Finances as a Single Parent:
For single parents who provide for the entire family, keeping track of their finances is vital. Financial strategies can be adopted to implement efficient money management. Finance management does not occur by accident. An individual should follow, adapt, and improvise certain financial strategies and also works toward implementing these strategies. Learning how to balance financial demands is one of the biggest challenges that single parents often face. A single parent has to struggle to construct a balanced strategy that satisfies the emotional and financial needs of his/her family.
Emergency Fund for Single Parents
As a single parent, an essential step is to build an emergency fund for your family. Preferably, try to stash expenses that will at least cover your expenses for three months. This could nudge you in the right direction when you unexpectedly lose a job or come across an unexpected expense.
Securing Insurance for Single Parents
Securing insurance is elementary for securing your financial stability as a single parent. Anything that is vulnerable to financial harm is recommended to be insured such as your car, health, and home. However, these should be prioritized as well, so that you can manage insurance payments and meet daily expenses at the same time.
Spending plans
A spending plan should be generated so that single parents can keep a tab of where their money goes. Make use of public transport whenever possible. A source for information, without having to pay much, are the public libraries. Movies, books, and music can be rented for free from public libraries. Seeking professional help is highly recommended in case if you are a single parent in severe debt trouble.
Savings
It is recommended that your savings goals be sorted into short-term, medium, and long-term. The amount of money that you invest in each of these should be determined by your goals. Also, at the end of each year, analyze if you are putting in the right amount of money for each of these goals.
A savings percentage should be allocated to save up your money. The number can be dependent on various elements such as your salary, rent, daily expenses, etc. Many financial experts recommend saving up between 6%-9% of your income. The savings can be increased as you receive a hike in your monthly wages.
Getting to know your budget is essential for the right financial planning. Recurring expenses should be identified and categorized. There are many online tools available to assist you with tracking and managing your income, savings, and expenses. Mint and Level money are some of the popularly used budget management tools available online.
Moreover, tax breaks can be of great help for single parents to get themselves ahead. Child-friendly tax breaks are often allowed by the Internal Revenue Service (IRS). The IRS also provides additional benefits such as deduction in college tuition fees and tax credits that are related to higher education. To keep up with expenses, consider a new career with better pay, is also recommended.
