Whether you’ve recently become a single parent, or you’ve been one for a while, staying within your budget can be difficult - especially during the tumultuous and unpredictable nature of a global pandemic. However, with appropriate planning, utilizing your resources and practicing discipline, staying on budget when times are tough can be possible.
Tip #1: Turn a Hobby Into a Side Gig
Whether you’re working less hours, got laid-off temporarily or just find yourself with more time on your hands, now could be an ideal time to turn a hobby of yours into an income source. From painting and artistic endeavors to offering workout classes, it’s easier than ever to market yourself, your services and your products online.
It’s very possible to earn extra income from turning your hobby into a side gig. If you do start to see an influx of income, be strategic and intentional with your spending.
Tip #2: Connect With Other Local Parents
It can be hard to juggle your to-do list with caring for your kids. Consider setting up a babysitting system with other parents in the neighborhood. Perhaps one parent watches all of the kids one day, then you can watch them another day, and the cycle continues. If your children are not of school-age yet, this can significantly save on childcare costs.
Creating something like this can give you a little bit of extra time to run errands after work, get some free time to make dinner - or whatever you need to do to help streamline your to-do list.
Tip #3: Take Advantage of Tax Credits
As a single parent, you have opportunities to lessen your tax obligation this year. Working with an accountant and/or financial advisor can help you better understand your options and certain opportunities.
Some of the benefits you can claim as a single parent when filing taxes include:
- Head of household
- Child tax credit
- Child care credit1
Tip #4: Keep Your Bills Organized
You’re juggling a lot, but staying on top of any recurring expenses and bills is crucial to remaining financially afloat. Keep your bills organized or, better yet, set them to autopay if possible. Late fees and interest can add up fast, making a financially strained household even more stressed.
If you do choose to set up autopay for your bills, be sure the checking account has enough in it to cover the recurring expenses. Getting hit with an overdraft fee is another financial penalty you’ll want to avoid.
Tip #5: Pay Off Your Credit Card
Much like paying your bills, make sure you are staying on top of your credit card debt. Credit cards tend to have high interest rates, meaning a missed payment could begin incurring a significant amount of interest right away. If you regularly find yourself in credit card debt, you may want to reassess your monthly budget and spending habits to better reflect your current income and necessary expenses.
Tip #6: Reassess Your Budget and Adjust Accordingly
If you're used to living in a dual-income household, it can be challenging to adjust your spending and saving habits. But living within your means will allow you to better get ahead of any financial turmoil and stay on top of your obligations.
When it comes to assessing your budget, here are a few effective things you can do:
- Adjust your electricity use (thermostat temperatures, unplugging appliances, etc.)
- Review your cell phone bill - could you get away with switching to a less expensive plan?
- Rent out extra space in your home
- Eat out less often
- Make your own lunches and coffee (especially if you’re now working from home)
- Search for sales when buying things like clothing, electronics, home goods, etc.
Tip #7: Set up an Interest-Bearing Account
When you set up a checking account, make sure you are gaining interest on the money you put in. This will help you save for bigger expenses, allow you to set money aside for unexpected medical problems, home repairs, so funds will be there when you need them the most.
This is the time that your money needs to be doing more for you. Make sure you are earning while it’s in the account.
It can be difficult to adjust to a new budget and make ends meet when you are a single parent. However, continue to be thrifty and always think towards the future, even when balancing with present day needs. It's an ongoing challenge and lifestyle adjustment, not a one time fix.
This content is developed from sources believed to be providing accurate information. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.