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Top 10 Personal Finance Tips for Single Parents

Top 10 Personal Finance Tips for Single Parents

The economy always works in cycles, and with these cycles our perceptions about money, how we should deal with it, and what our responsibilities are towards accurately informing our children about it also change.

A March 2012 survey suggests that more parents are talking with their kids regarding money. Parents are discussing with children what they need to understand about it in order to make more informed choices on money matters as they grow older.

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The current generation of students, or those who are in the initial years of their careers, are deep in student debt. I believe that one can avoid student debt if parents play their finances a bit more safely and carefully craft the financial future of their kids. Parents, though, can sometimes be poor role models when it comes to managing money and teaching the same to their kids. However, even if you are a single parent with limited means, it is still possible to take stock of things and enforce good financial discipline to achieve a secure financial future for your whole family.

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Here are my top 10 practical tips to prepare a secure financial future for you and your children:

  1. Kids usually approach their mother first on money matters, especially when it comes to seeking advice on how to save. So if you are a single father, chances are that your child may not approach you easily on this. Better prepare yourself and learn to direct the conversation to money matters and encourage your kids to speak about this more openly.
  2. Increasingly, single moms are not using bank accounts and are adapting other pricey alternatives to fulfill their banking needs. Having a bank account opens gateways for you to access other financial products to fulfill your financial needs. So, open a bank account if you don’t already have one or start using an existing one again.
  3. You will not need a budget if you learn how to pay yourself first. However, do budget for extra expenses related to raising your children, such trips to museums and other entertainment activities. Beware of spending too heavily on video games!
  4. Avoid taking loyalty cards and coupons from superstores. They are meant to save you money but at the same time they force you to spend more as well.
  5. Set up a life insurance policy and any other relevant insurance plans. If you are the sole breadwinner for your entire family and your children are still too young to work, it can help a lot in case of any emergency.
  6. Automate your savings and set savings targets to accumulate. Many banks offer savings or e-savings accounts, so set up smaller weekly automatic transfers. Start slow and build your savings bucket with smaller weekly contributions rather than making one large monthly payment.
  7. Start saving for your children’s college expenses early as costs of education are increasing fast. I always suggest that the best gift you can ever give your kids is to pay for their tuition fees. If you are living in the US, you have the option to invest in 529 savings plans, but do check state-related conditions. Costs and conditions vary from state to state. Saving through a Roth IRA is another option for you. The trick is to start early—starting from the first birthday of your child.
  8. Teach your kids how to be self-sufficient by earning through doing small gigs such as selling candies to other kids in the neighborhood.
  9. Take time and review your net wealth and financial position at least once a month. Don’t stuff your shoe boxes with receipts, but rather focus on where your money goes and where you stand in terms of your net wealth.
  10. Family is always the first priority.

Starting early and becoming aware of balancing your and your kids’ financial needs is the key to achieve much desired financial discipline. A small amount of time invested in observing your own attitudes and behaviors regarding spending money can set up a solid financial future for you and your family.

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Adnan Manzoor

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Published on September 17, 2018

How Being Smart With Your Money Leads to Financial Success

How Being Smart With Your Money Leads to Financial Success

Achieving financial success is not something that just happens. Maybe if you win the lottery or something, but for the average person like you or me, it comes from a series of small steps you take over a long period of time.

With each step, you form a new smart money habit. And with each smart money habit, you build towards financial independence.

So what sort of habits can you form to get on that path? Let’s take a look at smart money habits you can start today to get you closer to a financially independent future.

1. Avoid being “penny wise but pound foolish”

It’s tempting to try saving a couple cents here and there when buying small items. However, that’s not where the real money is saved. You’re putting in extra effort for something that doesn’t move the needle.

You get the most bang when you’re able to cut down on your bigger bills. For example, finding a lower interest rate for your mortgage could save you $50+ per month. And cutting your transportation bill by purchasing a cheaper car or taking public transportation can provide large gains as well.

So, look at your recurring expenses such as housing, transportation, and insurance, and see where there’s wiggle room. It’s a much better use of your time than trying to pinch pennies here and there on smaller purchases.

2. When you want something big, wait

Impulsivity can get you in trouble in most aspects of life. Finances are no different.

It’s human nature to see something and want it right then and there. It starts as a kid in the checkout line at the grocery store, and it continues on through adulthood.

We get an idea in our head of something we want, and it’s hard not to go out and get it right then.

A good example is wanting a new car. Perhaps you’ve had your car for several years. It’s crossed the 100k mile mark. Maybe maintenance is due, and you’re annoyed that you need to replace the timing belt or purchase new tires.

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So, you get the itch.

You start digging around online, and you realize you could trade in your current car for something newer and more exciting… all for a few hundred bucks a month. Then you get obsessed.

Here’s where you have to take a step back.

Your newfound obsession is clouding your judgement. Rather than giving into the impulse, wait it out.

Set a timeframe for yourself. Maybe you come back to the decision three months down the road. See if the obsession lasts.

It might, but often, a funny thing happens. Often, you forget about it. And often, you find that the new car wasn’t a need at all.

The impulse faded. And you just saved yourself a ton of money.

3. Live smaller than you can afford

You finally get that big raise. And you want to celebrate – and why not?

You’ve been looking forward to this forever. And after all, it was all due to your hard work.

That’s fine, splurge a little. However, make it a one-time deal and be done.

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Don’t get caught in the trap that just because you’re now making more money, you should spend more.

Too often, people get more money and feel like they that gives them the means to buy a bigger house, a bigger car… you know the drill. Resist.

The fact is that living smaller than what you can afford is one of the fastest ways to build savings.

But if you constantly upgrade as you begin to make more, then you’ll never get ahead. You’ll just build up more debt along the way and have just as little wiggle room as before.

4. Practice smart grocery shopping

Food… it’s one of the biggest portions of any budget. And if you’re not careful, it can be one of the biggest drains on your wallet.

But luckily, there are a few things you can do to ensure that you stay smart with your money when buying groceries.

Create a grocery budget

Set a strict weekly grocery budget. When you know how much you can spend on groceries, you can then plan your weekly menu around it.

Once you know what all you need, you can go shopping and keep a running tally as you shop to ensure you’re on track.

I tend to do this in my head, rounding for each item. However, writing it down as you go would probably work best for most people.

Make a list… and never deviate

Never go to the grocery store without a list. If you go to the store with a ballpark idea in mind, you don’t have a true ide of what you need.

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You’re not well-researched. You don’t know what the sales are. As a result, you’re going to make decisions on the fly.

These impulse decisions will lead to overspending, which will derail your grocery budget.

Eat before going grocery shopping

It’s also important to eat prior to going to the grocery store. Hunger is a powerful force.

If you’re shopping on an empty stomach, everything is going to look good. In particular, you may find a lot of ready-made, processed snacks will look enticing.

After all, you’re hungry now and that food is easily available. So subconsciously, you may lean towards those items.

Unfortunately, not only are those items typically less healthy, but they’re likely more expensive. You pay for convenience.

However, when you eat prior to shopping, then you’ll shop with a clear mind. Your hunger won’t cloud your judgement, influencing you to make poor decisions like a cartoon devil resting on your shoulder whispering in your ear.

This makes it much easier to stick to your grocery plan.

5. Cancel your gym membership

Now that you’re all set on your food, it’s time to get smart about managing your budget in terms of physical fitness. And let’s begin by avoiding the gym. The gym bill, that is.

The average gym membership costs around $60 per month. That’s $720 a year.

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Yet, two out of three gym memberships go unused. That means two-thirds of people who have a gym membership are literally giving away almost a thousand bucks a year. It’s crazy!

I recommend seeking an alternative. One good alternative is to look into fitness streaming services.

Streaming services allow you to stream hundreds of workouts like Insanity and p90x, right in your own home for around $10-20 a month. That’s $40-50 less a month than the average gym membership.

Of course, then there’s the free option. The internet is full of free workouts that you can do on your own with minimal or no equipment.

For example, there’s the Couch to 5K program, that I personally used a decade ago to ease myself from couch potato to running my first 5K race. If I could do it, anyone could.

Then there are free resources like reddit that have limitless information on workouts. The Fitness subreddit has done all the research for you, populating workout tips and detailed workout routines for anyone to use in their wiki.

There are several routines that require no equipment. And you can join in on the subreddit to become part of the community, making it easier for those seeking comraderie and encouragement in their fitness goals. All for free.

It’s baby steps… And baby steps can start now!

I’ve never met anyone that can’t stand to be a bit smarter with their money. And on the flip side, anyone can get smarter with their money. But remember, it doesn’t happen all at once.

Begin by fighting your impulses. Prepare for the week and be smart at the store. And cut monthly expenses like gym memberships that are overpriced and you probably aren’t getting your money’s worth out of anyway.

The devil is in the details. And the details can change your lifestyle and prep you for a financially independent future.

Featured photo credit: Unsplash via unsplash.com

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