Finances for Single Parents

Raising children is a rewarding experience, but it can be especially stressful for single parents who face extra demands on their time and energy. Being a single parent often means assuming sole responsibility for making sure your children’s needs – and sometimes a few wants – are met. Though there is no fool-proof plan for managing finances, there are things that families led by single parents can do to maintain financial stability: 

Make a budget – and follow it closely. Calculate your income and expenses and break your budget down into targets weekly, monthly and yearly increments. Don’t forget to factor savings into your plan. Follow your budget by documenting your spending and adjust as you go. The cost of raising children can be unpredictable, so understand that you may stray from your plan – but it’s possible to get back on track. If you spend more than planned on a vacation, holiday gifts or other significant expense, tweak your budget for the next month (or longer) to accommodate for the difference. 

Balance your financial goals. If your family is dependent on a single income, it may be difficult to see beyond the next few days and weeks, but keep your long-term goals – like retirement or sending your child to college – in mind. A good starting place as you consider what you can sock away is to prioritize what you value most. Instead of buying your child a treat every week, save $25 each month for college education. Sticking to a plan can be difficult, but your family will benefit in the future from your smart planning and systematic saving – even if it sometimes means sacrificing in the present. 

Protect your family. Establish a crisis fund for unanticipated events and expenses like medical emergencies, home and car repairs or the loss of your job. Your goal should be to save enough money to cover your basic necessities and reoccurring expenses for at least three months. Take a close look at your insurance policies to ensure they cover your children. Also consider investing in life insurance if you haven’t already, and create a living will so your kids will be protected should something happen to you. 

Be honest with your children. Being prudent when money is tight is an opportunity to teach your child about money and the importance of budgeting. If your younger child has an expensive item on his or her wish list, explain the process of saving for a costly item that is a “want”. You may include your child in the saving process and teach him or her about the costs associated with wants and needs. If you’re supporting older children, encourage them to get a job if what you provide doesn’t cover the cost of their desired lifestyle.  

Put your own financial stability first. These are hard words for many parents to hear and accept, but covering your children’s needs is dependent on your own financial security. It may seem logical to put your child’s needs ahead of your own, especially when it comes to financial matters. But though these decisions may never come easily, setting yourself up for financial stability now and later in life is one of the most important things you can do for yourself – and for your children.

One of the most valuable lessons a single parent may learn is to ask for help when it’s needed. Keep in mind that a financial advisor can guide you through all of these steps in addition to helping you plan and save for your family’s short and long-term goals. 

Rob Davis lives in University Place with his wife Lorri and sons Wesley and Parker.  With over 34 years of experience, he is a CERTIFIED FINANCIAL PLANNER™ practitioner and is licensed/registered to do business with U.S. residents in the states of Washington and Idaho. 

Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients. 

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