When you’re a single mom, you have stress enough for two or more. It isn’t sufficient to keep a roof over your head — you want to provide the most secure life possible for your children.
The more economic savvy you develop, the better. Here are eight financial tips for single mothers to help you not only survive but thrive.
1. Protect Yourself
It’s tragic, but the nation that bills itself as the greatest still stands unique among industrialized countries in not guaranteeing health care as a right to all citizens. One accident or catastrophic illness can bankrupt you, even if you have coverage. Please educate yourself on your options and pick the best plan to provide for your needs.
Make sure you keep your kids covered, too. While programs exist to help those under 18, you need to apply for these, and the process takes time. Please don’t wait until your child develops a condition — it could cause unnecessary delays in care.
2. Protect Your Children
What would happen to your children if you were no longer there to provide for them? When you become a parent, covering yourself with life insurance is a must. Otherwise, your children could face untold turmoil when they should be mourning their loss, and the ripple effect of financial hardship can last a lifetime.
That said, you shouldn’t necessarily name your infant as the primary beneficiary. Doing so means that the money gets managed by the courts until they reach age 18, which could cause hardship growing up. Instead, appoint the person most likely to care for your little ones if the unimaginable occurs.
3. Make a Budget
You’ll never get a grip on your finances if you don’t know how much money you have left over each month and where what you spend goes. Fortunately, many financial institutions make it a snap to create your budget by automatically categorizing your expenses so that you can see where you can reduce them.
You’ll still have to do some work, although apps such as Truebill can make your job easier. Once you label each expense, such programs automatically sort expenses and alert you when your spending increases or decreases for a given category. It also helps you identify and cancel unneeded subscriptions, putting money back in your wallet each chance you get.
4. Pad Your Emergency Fund Every Chance You Get
Experts recommend keeping an emergency fund of three to six months worth of living expenses in case of job layoffs or other emergencies — like pandemics. However, if 2020 depleted your stores to zero or you don’t have anything left to save at month’s end, you might have to rely on found money to rebuild.
Fortunately, tax season will arrive before you know it. If you anticipate a refund, use that money to line your savings. Another idea is to take on a part-time job if you already have a full-time one and direct your deposit to a savings account that you don’t link to any others. Decline so much as a debit card so that you have to drive to the branch to take out cash, and you’ll be more likely to let that kitty grow.
5. Learn About Investing
Unfortunately, traditional savings vehicles don’t keep pace with inflation. Historically, the stock market does a better job, but you might be one of the many who shies away due to the risk.
Why not look into opening a mutual fund? These investment vehicles let experts diversify your portfolio for you, minimizing your risk and helping you grow your nest egg.
6. Start a Side Business
It’s a sad fact of life, but working alone has become the quickest route to the poorhouse in America. The average wage hasn’t kept pace with inflation for over 40 years, and those 3% annual raises won’t let you keep pace when housing costs climb faster and medical and educational prices skyrocket.
If you don’t have the capital to invest, you should create a residual income stream that puts money in your pocket without much extra effort. After all, your human body can only physically clock in so many hours. It can take considerable time to establish, but once you design that Udemy course or write that how-to book, you can let the sweet sales add up while you sleep.
7. Put Your Assets to Best Use
Even if you have a spare bedroom after decorating the nursery, you might not relish the ideas of strangers in your home, especially now. However, if you have a camper or even a shed that you can fix-up into outdoor lodging, you can rent them out and earn extra cash.
What if you rent? If you happen to have a spare vehicle, you can loan it out if it is in good condition. However, even if you drive a beater, you can sell advertising space and earn a few extra coins when people dial the number on your ride.
8. Embrace Minimalism
Take a look around your room. See all that stuff? It used to be hours of your time that you sacrificed working to get all those dust collectors. Was it worth it?
You don’t have to go crazy and start tossing everything you own, but embracing a minimalist mindset can help improve your finances. Practice the one-in, one-out method — before you buy anything new, you sell or donate an item you already have. At the very least, pause and reflect on whether or not that designer diaper bag is really worth eight hours of your time.
Get a Better Economic Grip With These 8 Financial Tips for Single Mothers
Single mothers have to mind every penny, and they need all the advice they can get. Please heed these eight financial tips and protect those you love the most from economic hardship.