Facing the prospect of life with only one income can seem daunting.
Whether it be because of a layoff or by lifestyle choice, you can transition to a one-income status with proper planning and still raise your baby well. If you manage your finances right and cut down unnecessary expenses, your life with your baby will move on with joy.
Based on my personal experience, dividing the family's expenses into two categories has helped me determine what costs need to be eliminated in order to make ends meet. Below are the first three steps you need to take.
Step 1: Determine the “Fixed Expenses”
Jotting down the regular monthly bills you receive can be categorized as "fixed expenses". This list includes your electricity bills, water bills, rent / mortgage, car insurance and phone bills.
Apart from the bills you get monthly, you should also list down the important monthly expenses like, car gas, baby formula, diapers, and other baby necessities your child needs.
Step 2: Determine “Flexible Expenses”
Flexible expenses are the materials you spend money on that you can either do away with, or spend less on. Some examples are your monthly grocery items, cable fees, magazine subscriptions and other similar expenses.
Step 3: Cut Out What You Do Not Need
There is a big difference between wants and needs. Continue spending money wisely by eliminating what you do not really need.
If there are TV shows that you religiously follow, you can disconnect your cable, wait for a few months and just watch them on video for free.
Barter with other families for babysitting. Connect with your friends who are also trying to keep their costs low and trade babysitting services. This way you can cut costs on child-care allowing you to get some time off once in awhile. Another example of this is carpooling. It can help you and your friends save on gas.
A wallet full of credit cards does nothing but encourage you to spend now and worry about debt later. If you carry two or more cards, consolidate to one credit card and keep the one with the lowest interest rate. As there are banks that offer good introductory deals but raise the fees later, make sure to read their fine print first before deciding which card to keep.
Cut back on your food expenses. This means you need to eat more at home and less in restaurants. Buying pre-packaged foods and snacks is also more expensive than creating your own dish. Spending less on your groceries is also the perfect time to eliminate junk food at home.
Another tip is to clip coupons for your staples. This way you can save more money for other items you want to buy.
There are so many tips circulating on the internet about practical information to help you get your finances back in order. If you feel like you're walking in circles reading all this information found on the Web, here are some practical advice that single-parents should consider.
Pay For Your Family's Necessities Only
Your number one financial priority is providing food on the table and putting a roof over your heads.
To avoid overspending, always list down what you and your child needs. If you have older kids who go to school, it is also important to include school expenses in the budget.
If you can't keep up with the bills anymore, it is a good idea to apply for government assistance.
Apply For Government Assistance
As many people abuse the system, there are some single parents who simply rule out government assistance to remove avoid other people’s criticisms. But if it seems impossible for you to make ends meet, forget about what other people think or say. You absolutely need to apply for it.
Here are important government assistances you need to apply for.
1. Section 8 Housing
This is a program that provides assistance to those renters who can no longer afford their rent. The amount you will receive monthly will be based off of your income.
2. Food Stamps
Food stamps are a great help in buying your groceries. It is a monthly allowance that automatically goes to a debit card that you can use to buy your necessities. And yes, you can purchase baby formula with food stamps.
3. Daycare Programs
For low-income families, there are programs that pay partly or pay in full for daycare expenses. This government assistance is usually granted to many single parents - especially those who still attend college.
4. Health Insurance - Medicaid
Medicaid is a government-provided plan that eliminates medical deductibles to low-income families. This means that when you get hospitalized, you do not have to pay for the excess fees.
Some parents feel embarrassed about getting government assistance. At the beginning, I was too. But these programs are discreet. You do not have to let anybody know that you are getting help.
Formulate A Budget
As soon as you determine the assistance you qualify for and how much money you need to spend on for food, you can decide what to do with the leftover budget.
It is recommended to always save up for an emergency fund. You never know what life will throw at you, so it is best to stay prepared.
After establishing how much goes to your family's emergency fund, below are some other budget categories you can allot your leftover money to:
1. Retirement plan
2. Debt payment
3. Financial aims (buying a car or house, paying for a life insurance plan, saving up for your baby’s college fund, etc.)
4. Occasional gifts for birthdays or Christmas
5. Clothing and baby gear
Find Ways To Save Money
Your outlook in life can definitely make or break you financially. There are many single moms and dads such as myself who try to see the positive side of everything, and doing so will dramatically help your situation. Below are some examples of how to save money without eliminating the things you love to do.
1. Cut Your Entertainment Expenses
People will always find ways to entertain themselves, and one form of entertainment that almost all parents love is watching their favorite shows. To save up, you can cut your cable TV and subscribe to Netflix. It will only cost you $7.99 per month.
2. Online Shopping
If you are like many single parents who find online shopping as the most inexpensive and convenient way to purchase your necessities, you can subscribe to Amazon Prime. It eliminates shipping costs and you only need to pay for $99 per year.
3. Shop At Thrift Stores Or Wait For Mall Discounts
If you know your way at thrift stores, you will eventually find what you are looking for at a cheaper price. But if you prefer to go to malls, you can always save some money first and wait for stores to go on an all-day sale.
Single parents tend to become overly stressed due to the complicated financial situations they have to overcome. To completely eliminate this stress, you must pair cutting cost with earning money.
Cutting cost limits you from spending what you want and need. But when you pair it with earning money, you ultimately remove this limitation and allow yourself to fully provide for your family's needs. For example, your child could need braces in the near future. Earning money will help you save up for those future dental expenses.
"How do single parents afford to live?" This is always the question many parents asks. When you start with a two-income family, the new situation with one income can take its toll on you. But if you decide that you and your family will make it through this, you will surely succeed.
Single parenthood has its share of tough moments. But if you respond in the best way possible, you will surely rise to the occasion.