How Can A Single Mom Afford To Live On Her Own
Of the 11-plus million single-parent families in America, women are the head of 80 percent. Meaning all of the expenses involved in raising the children of those families fall squarely on the shoulders of the mother.
The cost of housing for a single-parent family is much the same as that for a traditional family. The only real difference is a single-parent family has only one income. At the same time, many traditional families have two incomes.
In an economy like ours, how can a single mom afford to live on her own?
The cost of living is high. Most families require two incomes. Single mothers must find cheap housing (HUD, a roommate, or move). She must also budget her money. There are other things she can do, like find side gigs she can work from home. Another thing she can do is use sinking funds to help fund future events.
How Can A Single Mom Afford To Live On Her Own
Some of the things she can do are find a cheaper place to live. She needs to be mindful of how she spends her money. (Who doesn’t?) Returning to school to become more educated and qualified for better-paying jobs is also a good move. Another is earning extra money through side gigs that she can work from home.
Using tools like a budget and a spending journal will help you avoid waste.
Take advantage of organizations that exist to help single moms.
Below are some more tips you can use if you’re a single mother who wants to live independently. Read on.
Mindset
Mindset is the established set of attitudes you hold. We all act and live according to our philosophy or mindset. Here’s an example: If saving money is important to you, you’ll look for ways to save money. (Pretty obvious, isn’t it?) Mindset is not wishful thinking. It is determination in action.
Saving money should be important to you, not just because you’re a single parent; it supplies the means for anyone to accomplish their financial goals.
Where To Find Affordable Housing
As I said earlier, the cost of housing is most likely to be your greatest expense.
You have several options for dealing with this:
If you’re determined to live alone, you can go through HUD.
The U.S. Department of Housing and Urban Development (HUD) works with property owners to offer reduced rent to low-income families. While subsidized housing assistance isn’t limited to single-parent families, it’s one of the most common rental assistance programs available to single mothers and their children.
Note: HUD housing isn’t always available or may not be available in your first pick of neighborhoods.
Here are more options:
- Rent an extra room for someone who wants some storage space
- Move to a cheaper place
- Move back in with your parents
- Get a roommate
- Become a roommate
Budget
Budgets are important. We all know it’s not fun being broke before payday or when you need to make a car repair and have no money. A budget will help you direct and save money for what and when it’s needed. You decide where you want your money to go and keep it for that purpose rather than frittering it away.
If you need help developing a budget, read my article on how to “make a budget.”
Caveat: No matter how reasonable your budget is it will do you no good if you don’t stick to it.
Single Mothers Plan: Where Do You Want To Be In 20 Years
Make a 20-year plan and know you won’t get there without intermediate goals. Where do you need to be in 5, 10, and 15 years to achieve your ultimate goal? How are you going to accomplish them?
For instance, you may want to have the short-term goal of having an emergency account and being debt free in one year.
You may want to save money to buy a car over a period of three years.
In five years, you want to have saved the money to make the downpayment on a house, and then start saving for the kids’ education.
When you know where you want to go financially, add categories to your budget to include these things even though you may not be able to begin saving for them immediately. The categories you don’t presently use will help keep you aware and motivated to work towards these future goals. And, should you should experience a windfall or raise, you will already have categories where you can make that money start working for you.
Open Two Bank Accounts
Opening a bank account is a good move. A bank is a safe place to keep your money, and it’s easier to manage your money if it’s all in the same place.
The first account should be a checking account with a debit card attached to it. This is the account you will use to pay your bills and use for your daily living.
The second account should be a savings account. This is where you’ll put savings. Have you ever saved up for something? The long-term categories of your budget are essentially a collection of sinking funds; I use sinking funds for all my long-term goals. For more information about sinking funds read my article =how to use sinking funds=.
Sinking Funds
I think a little more information on sinking funds is needed.
A sinking fund is a convenient way to save for something over time and to keep track of your progress. Some sinking funds can be used over and over again if they are for recurring expenses, like an insurance premium that’s paid every six months or a periodic oil change for your car. As soon as that money is paid out, you start saving again for the next time you’ll need it. I do this with almost everything I repair, replace, or replenish, including a car.
I save all of my money in one account and have a spreadsheet that tells me how much I have in total and how much I have saved for each category like tires for the car, a new computer, my next vacation, and everything else.
I’m sure you realize that keeping track of all this will take some bookkeeping. Your bookkeeping can be as simple or as complicated as you want to make it. You can have a category for every little thing or something more general. For example, you can have a category you label “Auto” and have it cover anything/everything that has to do with your car, from fuel purchases to replacement. Or, you can make separate categories with labels like “Fuel,” “Oil Change,” “Tires,” “New Car,” etc. Personally, if something very important to me and can be divided into various categories (maybe with different times lines for accomplishment), I’ll tend to be more specific. If it’s something I feel is more general, like “Clothes,” I wouldn’t use separate categories for a winter coat and a bathing suit–but you might feel the need to.
Since we’re talking about sinking funds, let’s talk about an important one.
Start An Emergency Account
Financial experts say you should save six to twelve months of living expenses for handling emergencies.
Again, you don’t need to save it all right now. Decide on an amount that you can reasonably save regularly. Making regular contributions to designated sinking funds is the way most people manage to save significant amounts of money. And money to get you through an emergency should be high on your list of priorities; if something untoward happens, you’ll have money to fall back on.
Improve Your Earning Power
Statistically speaking, college graduates earn significantly more (better than 50% more) than high school graduates. Having a better education puts you in a better position to land a better-paying job along with the benefits of a better-paying job – a better lifestyle, better housing, and better schools for your children.
There are organizations that specialize in helping single mothers achieve a college education. Google “educational assistance for single mothers.”
Check And Monitor Your Credit Report And Score.
I know it sounds odd coming from a frugal guy like me, but credit is a very important issue. Have you tried buying an airline ticket without a credit card–or renting a car?
Some employers do a credit check on prospective employees. Did you know that? That’s another reason to have good credit.
Monitor your credit report and score. Let’s face it stuff happens. Sometimes mistakes are made and not necessarily by you. Check the information frequently and dispute it when it’s wrong.
Build Good Credit
Money and credit have one thing in common: Just because you have some cash doesn’t mean you need to spend it. Likewise, having a credit card or qualifying for a loan doesn’t mean you need to use them.
You can, however, use credit to your benefit. One way to build good credit is to make a purchase and pay it off before it’s due. (Pro note: Never buy something with a credit card unless you have the money to pay for it.)
AND NEVER BE LATE!
Consolidate Your Credit Cards And Other Debt
There’s a lot of talk about plans for consolidating debt to pay off loans and credit cards. Debt consolidation is not a one size fits all solution.
A good plan will save you money and have you debt-free sooner than working on individual accounts by yourself. Be aware: If a debt consolidation plan interferes with your credit rating, it may not make sense to consolidate your bills.
As another example: You may have a large debt that will be paid off in five years and several much smaller bills that will be paid in a year. If you do a consolidation, say for three years, you could be paying the one (consolidated) bill with larger payments for a couple of years longer than you would have after you finished paying off all smaller ones at the end of a year.
In other words, if you don’t consolidate, when the smaller bills are paid off, you will free up some cash. In this case, why would you want to consolidate all those bills? At the end of the year, you could decide what you wanted to do with the freed-up money. Apply it to your still existing debt? Use it for another project? Save it? It’s yours to control.
Given the above scenario, it doesn’t make sense to me to consolidate.
Understand Your New Tax Situation
I’m not asking you to become a tax expert. All I’m saying is when your marital status changes your tax liability will change; there may be some benefits you can take advantage of.
Conclusion
How can a single mom afford to live on her own? It may not be easy, but it’s doable. Using tools like HUD, budgeting, side gigs, and more education will help you pave the way to a better life for you and your children.