How to Successfully Manage Money as a Single Parent
As a single parent, you must be aware of how challenging it is to take care of your finances and kids. Ensuring financial stability amid your child's growing needs is not a cinch.
While the cost of living is continually soaring, it has become toilsome for single parents to stretch their money. The soaring prices are what you can do nothing about, but you can find out a way to manage your finances more smartly.
How can you manage your finances as a single parent?
When you have the responsibility of a child, and you do not have someone to share the financial burden with, it is easy to feel overwhelmed, but there are specific tips to help you stay afloat.
1. Know what you owe
First off, you should know how much debt you owe, as you cannot come up with a plan until you know how much you are to pay back. Make a list of debts you have taken on, including credit card bills,
loans in Ireland with no credit check, payday loans, a mortgage and a car loan.
A mortgage and a car loan are long-term loans, so they will require you to pay off the debt in fixed instalments. In addition, other debts like emergency loans and credit card debt are lump sum debts.
As long as you do not pay them off, the debt burden will be much, but as you repay the amount on the due date, you will be left with only instalment loans. Making a list of your debt will make it clear to you how much you owe, and then you will make a repayment strategy.
2. Take help when you have fallen into debt
It is easy to tackle debt when you are paying money on the due debt, but as you miss the repayment, you will end up rolling over the loan. Small loans, including credit card bills, are very expensive. Once you miss the due date, the interest rate will quickly accrue and eventually, you will fall into a debt cycle.
You should immediately make a repayment plan, so interest does not further increase the cost of debt. Talk to your lender and ask them if they can put you on another repayment plan. They may also offer a payment holiday for some time.
Consult a debt management agency. They will analyse your financial situation and then try to negotiate with lenders to accept less money than the due amount. Remember that you will have to pay fees to the debt management company.
Whatever plan you opt for, make sure you do not have difficulty paying down the debt.
3. Create a monthly budget
Whether your financial situation is strong or poor, you cannot ignore creating a monthly budget. Even if you have not fallen into debt, you should make a budget to stay on top of your expenses. Budgeting is essential, according to financial counsellors, as it helps you have a clear picture of where you stand.
You must know how much money is coming in and how much is going out. Make a list of all expenses, including debts and figure out if you are able to pay them from your income. It is a good sign that your current income is more than your current expenses.
However, if the reverse is the reality, you should figure out ways to cut back on your expenses. First off, you should whittle down your discretionary expenses. These expenses include dining out, entertainment and fun expenses.
Do not hesitate to live off a lean budget if you have to take control of your expenses. However, sometimes the financial condition could be better so that more than just saying no to inessential costs is needed.
In this situation, you should consider increasing your income sources. Find out a side gig that lets you earn more money. Talk to your employer about a pay hike. If a pay hike is not an option, you should consider landing a new job with high remuneration.
4. Have an emergency cushion
Unexpected expenses can crop up at any time. Therefore, it is essential to have an emergency cushion. Financial experts suggest that you should have an emergency corpus that has the potential to cover the expenses for at least six months.
If you are unemployed or you come across unforeseen expenses, your savings will back you. Sometimes you may need a large amount of money, and your savings may fall short of cash. You can take out a loan, then. However, make sure that you are able to repay the debt.
Use the online loan calculator to know how much it would cost you. Remember that the actual cost will be more than the estimated value by the calculator. See if your budget has the scope for paying back the debt without compromising your essential expenses.
Since each lender charges different interest rates, it is vital to do proper research, so you choose a
genuine and honest private money lender in Ireland. Have a good credit score, so you get money at affordable interest rates.
5. Protect yourself and your children
As a single parent, you have complete responsibility for yourself as well as your children. Make sure that you have got medical insurance and that you have covered your kids as well. Do not forget to stash away money for higher studies for your children. You should also set aside money for your retirement. It is vital to protect yourself and your children against expenses to happen in the future.
The final word
Managing money as a single parent can be pretty challenging, but you can stay on top of your expenses if you create a budget. It will help you understand how much you are earning and how much is going out. Save money for higher studies for your children, emergencies, and retirement. Borrow money only when it is urgent and when you are sure that you can repay it.
