Saving money can be difficult for most people. Real wages have stagnated since the 1970s, and they have barely budged up since then when accounting for inflation. Single-parent households tend to have lower incomes and financial stability than two-parent households. With the gender pay gap, statistics would indicate that single mothers will have more trouble than most when it comes to saving money. However, single mothers are not without agency in building a secure financial footing for themselves and their children.
Learn To Save Money as a Single Mom
Taking advantage of educational opportunities can be a great way to earn more, and the more money you make, it’s likely that more money will be available for savings. College can cost quite a bit, and student loans can be one of the biggest drags on a family’s finances. However, education does not have to come from a college degree.
If you have a job, it’s a good idea to learn the ins and outs of your current employer’s business. The more you know and the more jobs you can perform, the more valuable you will become to your employer. This is true regardless of your family structure and the number of children you might have to provide for.
If you find that a promotion in your career path requires a college degree, some schools offer scholarships for single mothers. Additionally, if you have a relatively low income and dependents, it can be possible to obtain grants that do not need to be repaid. Another option is taking a class or two when you have a bit of money available. This could come from a tax refund or some overtime at work. Community college can be a good option for saving money on your education. Some community colleges offer online classes and degree programs that can fit into your schedule better than a traditional school. Once you have the appropriate education, it’s more likely you’ll have money available to save.
Rely on Family
One of the biggest expenses that comes with raising a child is the cost of childcare. Only Mississippi and Louisiana have average childcare costs of less than $10,000 per year. If you have family members who would be willing to help out with childcare for free or for a reduced rate, you could wind up cutting your expenses extensively. With less money going toward childcare, you should have more room to pay other necessary expenses each month. Not everyone will have the benefit of family who are willing to take care of children, but if this option is available, you should take it. If your income is enough, you should be able to put a bit of money away for a rainy day or for retirement.
Set up a Budget
When it comes to saving money, it can be difficult to do so without a monthly budget. A budget can give you the information you need to track both your income and your expenses each month. If your expenses are equal to or exceed your income, you’ll never be able to save money. Your primary goal should be to get your budget to the point that your income exceeds your expenses on a monthly basis. This could involve the two important steps of cutting your expenses and increasing your increasing your income.
Most single moms are skilled at cutting expenses down only to what’s necessary. However, there are some who have a problem with their spending. If you find yourself in the latter category, you’ll want to see if there are any ways that you could cut back on your expenses. The daily latte is the most commonly criticized unnecessary purchase, but there are many others. Cable TV subscriptions can be considered a luxury that could be cut from a monthly budget. If you have a cell phone with a data plan, you might be able to cut it back if you have regular access to WiFi. Additionally, it’s a good idea for everyone, not just single moms, to look at their monthly subscriptions. If there are any subscriptions that you don’t use or that give you only marginal value, cutting them out of your budget can be a good way to avoid some expenses.
Make More Money
In order to save for the future, you’ll need to have some excess capital available each month. If you make little money each month, this can be a problem. As a single mom, you’d probably like to avoid leaving the house outside of your regular work hours. Fortunately, there are ways to bring in some additional income each month. Some will bring in a few spare dollars while others could bring in hundreds. There are some sites that pay to answer surveys and search the web. These will bring in a few bucks. Other options include teaching and tutoring online or taking on freelance writing gigs. These can tend to bring in a few hundred per month depending upon the skill you bring to the table and how much time you’re willing to spend working. If you bring in more money, you’ll be more likely to have a little bit available for savings.
A budget is a monthly goal of sorts. To succeed in personal finance, you’ll want to have some goals that look toward the longer term. Where would you like to be in a year or five years? What would you like to provide for your kids in the future? These are a couple of questions you’ll want to answer as you draw up your long term goals. These goals will usually have an estimated dollar amount tied to them. If you have a cost estimate, you’ll know what to shoot for, and you’ll have a greater chance of hitting the target.
Your first goal should probably be setting up an emergency fund. While most personal finance experts recommend a six-month emergency fund, this will likely be difficult to hit in the short run. Slow and steady progress will allow you to incrementally build up to this level. In the near term, you’ll want to set a lower bar. Perhaps getting $1,000 or a month’s expenses in an emergency fund will provide you with a good level of confidence. With the confidence that you can build up an emergency fund over time, you’ll likely start to build momentum as you seek to grow your fund to the recommended six-month cushion.
Pay Yourself First
To really save money effectively, personal finance experts like Robert Kiyosaki and David Bach recommend paying yourself first. Most people pay all of their bills first and then try to save what’s left. These folks will likely have nothing left to save at the end of the month. If your employer offers a retirement plan, you’ll want to put a percentage of your pay toward it automatically. If you never see that money hit your checking account, you’ll be less likely to spend it. Additionally, with the expanded child tax credit, single moms are more likely to get a bigger tax refund. Putting this windfall into a retirement account or an emergency fund can be a great way to save even if your budget is tight in most other months.
As a single mom, you might wonder how it’s possible to save for the future. You, like most other people, have to be proactive. Setting up a budget that has room for savings and then saving the excess automatically every month is the best way to go. If you can avoid major emergencies, you’ll be able to build up some savings before you know it.