Whew, it’s 2022, baby! If you’re like me, you set some resolutions — goals and milestones to hit in this new calendar year. This might include fitness, relationships (start dating again, maybe?), self-care like travel, or read more books, get the kids on a chore schedule, making more money, or to start investing to build wealth.
If you are like 76% of Americans, you had a new year’s resolution focused on becoming smarter with your finances, according to a survey of 2,000 U.S. adults conducted by OnePoll. Unfortunately, history shows many people abandon their money goals early in the year.
If you are not in control of your finances, this affects your family life, because you are stressed, perhaps overworked and distracted worrying about bills. You are more likely to argue with your kids’ dad, which affects your co-parenting.
Money affects the men you seek out and attract — I have heard countless stories of very smart women moving in with all the wrong guys because they were tired of being stressed about rent.
Money affects your physical well being (less money means you are more likely to eat unhealthy food, pass on a gym membership and checkups, and suffer all the negative side effects of anxiety).
When you don’t have enough money, or feel that you don’t have enough money, you lose your power. That’s why you need to make more money!
When you don’t have enough money, you can’t protect your kids if something happens to you. That's why you need emergency savings!
Here is your guide to locking down some practical financial resolutions, stick to those goals, and uplevel into 2022 and beyond!
- Look for high-paying jobs.
- Maximize investing.
- Protect your family.
- Get rid of debt and improve your credit.
- Slash spending and get that single mom budget together.
- Start an emergency fund.
- Change your single mom money mindset.
- Focus on money role modeling for your kids.
- Find cash now to start.
1. Look for high-paying jobs and side hustles for single moms — near you or online.
When you are broke, or want more money for whatever reason, the first and natural thing to do is slash expenses. That is great, and you should do that. But the best and biggest way to have more in your pocket is to earn more. After all, If you focus on clipping $1 coupons for paper towels, the best you can do is saving $1. If you focus on earning and growing your career, the sky is the limit!
Building a career or business is the best thing you can do for your finances, your mental health, your parenthood and your future!
Not sure where to start? If you already have a job, here is my guide to asking for and getting that raise.
Here is a run-down of high-paying careers you can do from home.
2. Maximize investing — on every single-mom budget.
Saving money is so awesome, but investing is where the juice is. After all, if you park all you savings in a checking account, or a low-earning savings account at your local bank (as most are these days), your hard-earned money will be flat year after year. Meanwhile, inflation means the cost keeping yourself and your children alive goes up 2 to 4 percent each year.
Nevermind that you likely want to grow your quality of life, too!
That is why investing your money in the stock market is so important. Over the last century, stock market returns have averaged 10 percent.
In other words, if you don’t actively invest and grow your money, you are actually losing money.
You don’t understand the stock market? Feel intimidated and stupid when it comes to investing (even though you are smart, successful and confident in the rest of your life)?
Join the club. Most women do — including me! Wall Street — dominated by men — wants you to feel stupid so you’ll hand over your money to brokers and advisors — again, overwhelmingly bros — who you will pay a lot of money to manage this money.
Here’s how to get started:
- Establish financial goals.
- Make long-term financial goals: pay off debt, save for a home, retire
- Make short-term financial goals: pay off small sums of debt, create a budget, refinance larger loans, make a purchase like a home repair or vacation
- Make a plan to fund these goals (including growing your income, as well as living on a budget)
- Open your own investment account or see what your employer offers.
- Employer-sponsored plans — this is a retirement fund or heal savings account through your job
- Self-employed accounts — a self-employed 401k, a cash balance pension fund or an IRA that self-employed workers establish and fund
- Brokerage accounts — this might be through a brokerage like Fidelity or T. Rowe Price where you buy and sell equities. It is not typically tax-advantaged
- Consider investment options your investment account offers.
- Bonds: Retired women or women nearing retirement should make sure they have at least five years’ worth of their annual spending needs on the bond side of their portfolio to ensure they can go through a prolonged stock market downturn and not need to pull funds from the stock side of their portfolio.
- Stocks: When choosing investments to get exposure to the stock markets, choose low-cost and broadly diversified stocks to reduce overall risk. Broadly diversified means having exposure to both U.S. and international markets, large and small company stocks and growth and value stocks. “By being broadly diversified and owning investments that aren’t perfectly correlated with each other, clients reduce their risk of significant drops in portfolio value if a certain area of the market is dropping more than other areas,” says Lauren Niestradt, Certified Financial Planner.
- ETFs and index funds: Women can use low-cost exchange traded funds (ETFs) and index funds to build a low-cost, diversified portfolio that can generate a strong, positive return over the long run.
- Create a retirement plan.
- According to investment advice site the Motley Fool, you’ll need 80% of your preretirement income to survive. So if you earn $80,000 a year by the time you retire, then you’ll need $64,000 to make it once you stop working. That translates to about $5,333 per month.
- Fidelity financial investments firm recommends setting aside at least 15% of your pretax income, which sounds like a lot. That's because it is — especially when you're raising children. If you’re still in the process of building your career, saving 10% should do the trick. But as your income increases, so should your retirement savings goals.
- Prioritize retirement investing far above your kids' college education.
- Seek out expert help. Nonprofit organizations like Savvy Ladies, a free financial helpline, can answer questions about financial planning and connect you to financial resources.
If you need help preparing your financial future, check out the free tools offered by the U.S. Securities and Exchange Commission. This site offers info on investing, financial calculators, tips to protect your investments, and more.
3. Protect your family with insurance.
This post is designed to free you from worry: worry about making rent, worry about whether your car will break down and you won’t have enough cash to make repairs, worry that you will be stuck in debt forever.
A big part of building your wealth is protecting it. That’s why it’s so important to invest in reliable insurance coverage — for your home, your valuable possessions, your car, and more.
But even if you have all of those items covered, that doesn’t mean you won’t worry. You know why not? Because you are a mom.
Moms worry. We do.
But I can help you reduce your worry, including that horrible fear that something will happen to you, and as a single mom, you are your kids’ primary caregiver.
Life insurance is a big piece of this mom-worry therapy. With enough life insurance, you can rest easy that your children can be cared for financially in the event that you pass.
Bestow offers policies that start at $10 per month, for a $50,000, 10-year policy for a healthy 30-year-old non-smoker. Learn more in our Bestow review.
Also, read: Estate planning for single parents
4. Get rid of debt and improve your credit.
Reducing your credit card, medical, student and car loans means fewer bills, less money wasted on interest rates, and more money to save or invest.
Improving your credit score and history means more options and more control: With a high credit score you can get a car note, qualify for a mortgage, business or student loan — all of which could dramatically improve your family’s lives.
Many people take advantage of auto loan refinancing to get a lower payment:
If you want to see credit results fast, try Experian Boost, a 100% free tool that can instantly boost your FICO credit score. Average boost users see a 13-point increase. Try Experian Boost now, and get your free credit report and FICO score >>
5. Slash spending and get that single mom budget together.
Here is something surprising I recently learned about myself:
The higher my income, the greater my net worth, the less stuff I want.
Yes, I enjoy a beautiful home, nice clothes and jewelry, and enjoy good food. But the fewer items I own, the happier I am.
I like my closets and drawers and cupboards occupied only by items I use and enjoy.
The less crowding my fridge, the more I enjoy the meals and snacks I have — as the waste of uneaten food stresses me out. Read: Easy, affordable meal planning for single moms
Everything else must go. Bonus? Less stuff means more money!
6. Start an emergency fund.
Do you have at least 3 months’ living expenses in a savings account? No? Create a plan to build up a cash account that will save your butt in the event of unemployment, a natural disaster or otherwise being displaced, a major medical event or any other unforeseen financial event. Even a car repair can undo you, financially.
The value of this savings account is one part practical, one part emotional (you will feel better each and every day knowing this money is safe and available), and one part spiritual. After all, you make better, wiser decisions from a place of power when you not afraid. Money in the bank relieves fear.
7. Change your single mom money mindset.
The most important thing you can do to change your financial life, is change your financial mind.
How and what you think and believe establishes what happens in your bank account.
The first and most critical step to earning more, saving more, investing more, spending and stressing less about money, is to renovate what happens between your ears.
If you are stuck in broke, there are likely limiting beliefs specific to single motherhood that are spiraling in your mind. I have struggled with many of these, and have heard time and again (and again!) from moms on this blog and social media.
I’m a single mom, and single moms are broke. Of course I’m poor!
Reality: Yes, statistically, single moms are poorer than married moms. But, you are likely telling yourself that story (and it is indeed a story) based on decades of media portrayal of single mothers as downtrodden, struggling floozies, politicians who blame unmarried mothers as the source of all social ills.
There are also countless stories of both down-and-out married moms, as well as thriving, affluent, self-made single moms.
The beauty of living in 2022 as a woman is that compared with the sexism our grandmothers and even mothers faced, we have endless opportunities to earn and invest.
Here is a common money story single moms tell themselves:
No more I need to sacrifice and struggle and overcompensate for the fact that my children are from a broken home.
Reality: What’s with the martyr syndrome, mama? Not a good look! Focus on earning big, spending little, and maximizing quality time with your kids. Studies find that financial stability and a thriving mom are two of the biggest factors when it comes to child development.
Other ways to improve your money relationship: stop overspending on your kids (they really don’t need much), and focus on creating positive relationships for your kids, yourself and the whole family. Kids thrive not because their home looks like the Cleavers, but because they are safe, cared for, understood. You can control all of that, but first you have to decide to do those things.
What to do:
- Write down your limiting beliefs when it comes to money.
- Write down where these ideas came from. Who told you you are bad with money, or that you have to martyr yourself? What was your earliest memories of a single mom? Was she thriving, or struggling?
- Get therapy if you want. No shame at all! Online therapy is a great option, especially for busy single moms, since online counseling apps like BetterHelp allow you to choose from thousands of certified, licensed counselors, totally anonymously.
- Think about who your support system is. Do these people set big goals, and actively work towards them? Do they support your dreams and goals? Even the wonderful people who love you most may not be your money tribe. You can meet and be inspired by other, big-thinking and ambitious single moms who will change your paradigm at Facebook.com/groups/millionairesinglemoms.
Avoid temptation to focus on getting more alimony or child support — which are finite, negative and ultimately hold you back. Instead, my research found that moms who share parenting time equally are more likely to earn more, and feel better about being a mom.
8. Focus on money role modeling for your kids.
Like it or not, your kids are watching. Lecture them all the livelong day about the importance of saving, budgets and investing, but if your children see you live beyond your means and spend frivolously, one of two things will happen:
- They will repeat your bad habits, or
- They will grow up to have better money habits, and resent your bad ones. Especially if you are now financially dependent on your kids because of those bad habits, which they now feel pressure to care for.
Instead, involve your kids on your money journey. Set them up on an allowance system.
In this post, I elaborate here on what we do at my house, with spend/save/give jars, as well as a guide to teaching kids about money.
Talk to them about the importance of money for security, including all kinds of insurance policies.
Set a family money goal — say, an ice skating outing (which my kids have been nagging me about for weeks). If the event costs $50, find ways to save money (sell unused items, skipping a weekly ice cream treat), to save up.
Get creative, and pay attention to what excites your kids — and you!
When my friend Blake was growing up, his family made a game of seeing how low they could get the monthly electric bill. This is something I think will go over well at my house, as both my son and I are passionate about green living.
Not only do these measures teach your kids important, core skills, but it keeps you motivated and on-track, too.
Plus, it relieves guilt, since you know you should be a good money role model for your kids.
9. Start our money challenge.
The biggest obstacles to building wealth are bad daily habits and your mindset—things you can change with regular, dedicated practice.
I put together a 52-week money challenge to help single moms like you learn to control spending, start saving and investing, and turn around your debt and credit score.
If you're ready to revolutionize your finances — save more, earn more, and spend less — sign up here: