As far as I’m concerned, all you single parents are heroes without capes.
Well, you’ll swoosh on a cape when your kids want to play dress-up. But that’s beside the point. Single parents have to juggle work, kids and life. That’s no easy feat — especially on the wallet.
That’s why we put together these simple tips to help you better manage your money.
1. Involve Kids in Financial Decisions
Your kid sees their classmates taking piano, tennis, dance and karate lessons. But you might not be able to afford all of that.
Instead of feeling guilty — or worse, caving and overspending — have an open conversation with your child.
“Classically, parents will go behind a closed door to talk about saving, budgeting and investing,” says Maggie Johndrow, a financial adviser at Johndrow Wealth Management. “But psychologists have found that will make your children think finances are scary, taboo and something that’s not to be talked about in the open.”
Instead, Johndrow encourages parents lay it all out there. Let your child know your budget for after-school activities, then work together to pick and choose what you can afford.
“Empower them and teach them by giving them that choice,” she says.
2. Analyze Your Needs vs. Wants
An integral part of managing your money is budgeting. Ew, gross. We know. But it’s important to take a good look at what you’re spending and understand where you can cut back.
You don’t have to rely on complicated Excel-spreadsheet formulas or spend hours categorizing your expenses to stick to a budget. Instead, use an app.
An easy way to automate this process is to use Trim, a little bot that’ll keep track of all your transactions.
Connect your checking account, credit card and savings account for a big-picture look at your spending habits. Then, take a closer look by checking out each of your transactions. Set alerts that’ll let you know when bills are due, when you’ve hit a spending cap or when you’ve (hopefully not) overdrafted.
Best part? It’s free to sign up.
3. Pay Yourself First
Hey, you! Yeah, you! You’re important. Don’t forget to prioritize your needs — like your savings. Whether you’re starting an emergency fund, saving for a down payment on a home or planning a weekend getaway for you and the kids, why not make the process easy?
One of our favorite strategies? Set up automatic withdrawals from your paycheck, so you’ll squirrel money away without thinking about it.
One of our favorite accounts for this is Aspiration — you’ll pay no monthly fees, and you’ll earn up to 2.00% APY on your savings.
You’ll get access to an online-only account for spending and for saving. It comes with a debit card that earns 0.5% cash back on all your purchases, plus free ATMs, so you can easily access your money when you need it.
After you open your Aspiration account, use it to split your income:
- Automatically deposit a portion of your income into your spending account, and use that to cover basic expenses.
- Deposit what’s left into your Aspiration savings to keep it out of sight and let it grow. You’ll earn 2.00% APY as long you deposit just $1 a month.
Even if you’re slipping $10 into your emergency fund each month, that’s OK. Do what you can to take advantage of the compound interest.
4. Take Care of Your Debt
“I often find that people are struggling because of debt, so if you can come up with a debt repayment strategy and eliminate your debt, the other things all of a sudden become a lot easier,” Johndrow says.
Her top recommendation? Refinance. Refinancing can lower your interest rates and, therefore, lower your monthly payments.
You can basically refinance any type of debt, but here are a couple of examples:
- Refinance your credit card debt: Credit card interest is no joke. Refinancing your debt with a personal loan could help you save a ton. If your credit score is at least 620, a good resource is Fiona, a search engine that can help match you with the right personal loan to meet your needs. You can borrow up to $100,000 (no collateral needed) with fixed rates starting at 4.99% and terms from 24 to 84 months.
- Refinance your auto loan: It’s normally a pain to re-title your vehicle at your local DMV office, but a company called MotoRefi will do all the heavy lifting for you — and could cut your monthly car payment by $100 or more.
In addition to refinancing for better interest rates, Johndrow suggests extending the term of your loan if your budget is tight. “This might mean paying more in interest over time, but it might free up some monthly cash flow, which can help with your budgeting,” she says.
It gives you some breathing room.
5. Find Sneaky Ways to Save on Your Necessities
Finding ways to save on your needs feels harder than finding ways to save on your wants — but it’s possible.
Here are a few examples that’ll get you going in the right direction:
- Save on groceries with a cash-back app. There’s no way around groceries, but you can earn some money back with Ibotta. The app is free to download, and you’ll get a $10 sign-up bonus after uploading your first receipt.
- Save money by negotiating your bills. Don’t have time to call? Download Truebill, an app that’ll negotiate your bills, cancel unwanted subscriptions and refund your bank fees. On average, Truebill says it helps customers save more than $700 a year.
- Save money on your car insurance. One way you could save money is by shopping around and comparing rates. Use an online car insurance search engine like The Zebra, which offers “insurance in black and white” and compares your options from 204 providers in less than 60 seconds
6. Manage Life’s Risks
You never know what’s going to happen tomorrow, so it’s important to be realistic.
“God forbid something happens to you, and you’re all your kid has,” Johndrow says. “Life insurance leaves them with enough to still hopefully attend college and achieve their goals.”
If you’re under the age of 54 and want to get a fast life insurance quote without the medical exam, pushy sales calls or even getting up from the couch, check out Bestow. The company is built around one concept: helping you get the term life insurance policy you want, simply and fast.
It just takes five minutes to answer some basic lifestyle questions, and you can get quotes for up to $1 million in coverage without a medical exam. If you’re approved, you can personalize your coverage to fit your budget. You can change or cancel your plan at any time.
Johndrow also urges parents to look into disability insurance, in case you can’t work and need to supplement your income; and long-term care insurance, in case you need health care not covered by your health insurance.
7. Find Creative Ways to Diversify Your Income
We know you don’t have a lot of extra time, but if you’re looking for a way to make some extra money to cushion your budget, try something creative.
For example, have you ever thought about renting out your baby gear? Yeah, the stuff you have sitting around the house that your kids don’t need anymore.
Online marketplaces like BabyQuip allow parents to rent out strollers, car seats, cribs and other baby items to traveling parents. (Because checking a crib on a flight is near impossible.)
Stay-at-home mom Manuela Madrid rents her baby gear out. She works, on average, 12 hours a month and earns between $120 to $180 with each rental.
8. Don’t Sleep on Your Retirement Savings
Although retirement might seem like a faraway fantasy, it’s going to pop up sooner than you think.
If you haven’t yet started, open a company-matched 401(k) or your own traditional or Roth IRA. Even if you only put $5 in each week, that’s something — and you’re still taking advantage of that compound interest.
Having trouble prioritizing your savings? Johndrow urges you to think of it like this: “You can take out a loan for almost anything in life, but you cannot take out a loan for your retirement.”
So if you can’t put away money for your kids’ college fund? They’ll be OK. They can take out student loans like everyone else. But you can’t take out a loan to cover your living expenses once you retire.
“You want the best for your children, and the last thing you want to do is ask them to care for you when they’re trying to care for themselves and the next generation,” Johndrow says.
9. Make a Date With Your Money
At the end of each month, put the kids to bed, and pour yourself a glass of wine. If you prefer: Once they’re out the door to school, pour yourself a cup of coffee, and cozy in.
Then, take some time to look at your monthly income and spending and see how you’re doing. See how the last month went — which areas you excelled in and where you might’ve gone over budget. Then, take a look at the month ahead and note any additional upcoming expenses.
Even taking 15 minutes to check in with yourself can help you stay on budget.
Carson Kohler ([email protected]) is a staff writer at The Penny Hoarder.
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