Are all single moms destined for poverty, loneliness and effed-up kids?
Quick answer: NO.
But being a single mom does not mean you’re destined for the welfare line, free school lunches for your kids, or living in your parents’ basement.
The first step is to convince yourself that your new life will be one that is full, joyous and financially rich.
Love it or hate it, your finances are one of the biggest parts of your life.
Unfortunately, there are millions and millions of single moms out there that are not giving their finances the attention that the moms deserve. They tell themselves things like:
“Money isn’t that important.”
“The desire to be financially secure is selfish and greedy.”
“I should sacrifice my career and financial security to spend more time with my kids.”
“I’m just bad with money 🤷.”
“The only way to get out of this pay-check-to-paycheck mess is to find a man / make my ex pay more child support.”
“Money is too complicated.”
Everything is harder when you’re broke, and that includes being a single mom. The good news is that there are things you can do to get control over your finances, stop living paycheck to paycheck, and build wealth — and stop stressing over money.
Some of these steps are about logistics: Open a bank account, simplify your budget, check your credit score, consolidate your debt, buy life insurance, make more money. Steady is our recommendation for finding quality gigs and jobs. This app has helped more than 2 million people find work, earn bonuses and make up to $26/hr.
Some are about changing your mindset: Embracing your new reality as a single mom, letting go of past assumptions, setting goals.
And others are about learning how to take care of everything you’re working to build by practicing financial self-care. But all of them will bring you one step closer to living the life that you want for yourself and your family.
Here are my steps to living a rich single mom life:
1. Open a bank account
If you don’t have a bank account of your own, your very first step should be to open one. Why? Because it makes pretty much everything else in this list a whole lot easier to accomplish.
It also just makes the logistics of life a lot easier, giving you somewhere to cash your checks, transfer money, and get a money order—while making it less likely that you’ll need to rely on a payday loan or check cashing service.
CIT's eChecking account pays you interest! No monthly or ATM fees, great app and access to Zelle.
2. Create a budget
If you are stressed about money, chances are that you are also financially unorganized. Do you fail to stick to a budget (or maybe you don’t have a budget? You’re not alone!)? Don’t reach your saving or investing goals? Are your debt and credit scores a mess?
If you’re not clear on your money situation, chances are you’re avoiding it.
This may include failing to open bills, ignoring due dates, missing payments and looking the other way, or humming and tapping your foot when friends bring up investing.
First things first: Get real with yourself. This means opening all your bills as they arrive. No ignoring them. This is adulthood!
Second, plug all your accounts into a third-party app like You Need A Budget.
YNAB is an app and website that helps you create budgets and meet your financial goals — including paying off debt, saving for an emergency, car, house or education. Free 34-day trial.
The point is to get a single, clear picture of all your money, in one spot.
3. Cut expenses
Once you understand where your money is going, time to cut the dead wood. You know the usuals: gym memberships you don’t use (get real with yourself, sister! Plus: plenty of free ways to work out.), Hulu, restaurant meals, etc.
One favorite tool is using a bill negotiation service to cut spending. I use TrueBill’s ‘Lower My Bill’ service, which haggles bills on your behalf. I used this a few months ago, and TrueBill saved me $16 off my monthly AT&T bill while also getting me a bigger data plan, and $23.20 from my TimeWarner / Spectrum Internet bill! Boom!
TrueBill monitors spending (for free) using your bank and credit card accounts, and highlights recurring subscriptions — then will cancel for you any that you want to stop. These include:
- Cell phone service
- Gym memberships
- Time Warner Cable
- Car insurance and other insurances
No more retail therapy.
No more “treating yourself” to meals out you can’t afford, clothes that break your budget, or gifts for your kids that are outside of your financial goals. Easy, affordable meal planning for single moms.
If you are broke, shopping is not a hobby you can afford! Financial stress is not a treat — it is self-punishment!
While you’re at it:
Eat through your pantry and freezer.
Use up all the shampoo, soap, toothpaste and mascara in your house before you buy more.
Use up all the cleaning supplies and paper products en lieu of picking some up, blindly, at the market.
Make a strict list before stepping foot in Target and do not stray into the cosmetics departments for a “treat” – and I don’t care how great of a deal you find!
By making each purchase a conscious one, you will feel empowered and confident about your money.
4. Make more money
You can cut costs like Netflix and restaurants, raise the thermostat, cut coupons, and negotiate your insurance, and other tasks that do help your bottom line, but keep you focused on surviving financially as a single mom, and how to afford to live.
But there is only so much you can slash.
And super-budget thinking is small thinking.
However, if you focus on earning more, growing wealth, and thriving, the sky is the limit!
Decide today to increase your income, your credit, your bottom line. Recalibrate your energy into a wealth zone.
Some ideas for making more money:
- Take a mentor out for lunch to learn about opportunities in your profession.
- Research going back to school.
- Consider starting your own business.
- Join a local or national networking group.
- Hell, attend just one networking event!
- Talk to your boss about telecommuting and other life-balance arrangements.
Thanks to the Internet, it’s never been easier to make some extra money on the side.
There are hundreds of ways single moms can make money from home, in your spare time without having to wait tables on the weekend.
Already have a good-paying job you like? Negotiate a pay raise.
Steady is our recommendation for finding quality gigs and jobs. This app has helped more than 2 million people find work, earn bonuses and manage fiances. Earn up to $26/hr.
Going back to school? 20 scholarships for single moms.
5. Check your credit score for free—regularly
Your credit score is probably something that you don’t think about.
I go into the reasons why in my post here.
Let’s be honest, most people don’t spend a lot of time thinking about their score, but that could be a huge mistake.
Your credit score plays a huge role in several areas of your life.
It can be the difference in getting approved for a loan or mortgage.
It is going to also to impact the rates that you get on loans.
If you’re a renter, there is a chance that a bad credit score will get you declined for an apartment.
Also, when you apply for a job, your employer might check your credit score when you apply.
Having a poor credit score could keep you from getting the dream job or that new apartment.
Read more: How to use credit repair to improve your credit score and how Experian Boost could help — for free.
Want help to improve your score? The Credit People is an affordable credit-repair company that assigns a single customer service rep to improve your credit score quickly and affordably. It costs just $19 to get started repairing your credit >>
6. Consolidate your credit cards and manage debt
Are you struggling with debt, or otherwise balancing different credit cards and other bills? Have a lousy credit score? This is a complicated, time-consuming juggle that you need to deal with ASAP!
An important first step is to apply for a 0% balance transfer credit card — which can dramatically speed up your debt payoff process by saving you thousands of dollars in interest and fees.
The answer likely includes a combination of a strict budget, debt pay-off plan, and credit repair.
7. Set short- and long-term financial goals
Financial success is core to overall success as a single mom.
According to one New York University study, on average single mothers possess only 4 percent of the wealth of single fathers: single moms have $1,000 saved compared to the $25,300 that single fathers have. The study found that black and Latino single mom have a median wealth of zero, while white single moms report $6,000.
Compare this to the 64 percent of successful retirees (those who claimed to be comfortable in their retirement) who saved and invested during their 20s and 30s — prime baby-making and raising years! A recent Allianz survey of professional families found that the average traditional, two-parent family has saved $264,000 for retirement while single-parent families had just $171,000 in savings.
This disparity does not have to be your story.
But you must set some goals to buck the single-mom trap.
Short-term goals might be to pay off a credit card bill, build an emergency savings account, or save up for a vacation.
Long-term goals include buying a home, starting a business, remodeling the kitchen, saving for your kids’ college, or investing for retirement.
If you haven’t dipped your toes into the investment waters, you might be nervous about building a portfolio or opening a brokerage account. Learn about investing basics in this post.
8. Understand your new tax situation as a single parent
There is a huge difference in filing your taxes single compared to filing as a married person.
I don’t expect you to understand all of the tax rules, but it’s also important you understand the consequences of filing your taxes properly.
9. Protect your family with life insurance and disability insurance
Life insurance for single moms
Life insurance can be insanely affordable, easy to get, and just plain smart.
Read more about single moms and life insurance in this post.
Life insurance is one of the most important decisions that you’ll ever make for your loved ones, especially as a single mom.
Nobody wants to think about tragedy striking their family, but not planning for the worst could be one of the worst mistakes that you could make.
One reason that people don’t buy life insurance is because they assume that it’s going to be too expensive, but in most cases, that couldn’t be further from the truth.
Bestow offers term life insurance with a quick and simple quote process. Bestow promises no medical exam or lab tests, an A+ Better Business Bureau rating, and prices start at $10/month for up to $1.5 million coverage.
Bestow’s policies are provided by one of the largest life insurance companies in the nation, and rated A+ (Superior).
Disability insurance for those who are self-employed
Disability insurance is just what it sounds like: a policy meant to replace a portion of your income if illness or injury leaves you unable to work. Each insurance company has its own limits, but typically disability insurance covers up to 60% of your pre-tax salary.
You need disability insurance. Those who do not have disability insurance through a job, including the self-employed, can find individual coverage through reputable companies for an affordable price. Breeze disability insurance plans start at $9/month for people aged 18 to 60 years old, with monthly benefits ranging from $500 to $20,000.
Read our Breeze review.
Disability insurance is a common workplace benefit, often partially or completely paid for by the employer. But disability insurance for the self-employed is a different matter, because there’s no employer to arrange it.
No one likes to think about becoming disabled. Yet according to the Social Security Administration, a little more than 25% of today’s 20-year-old workers will become disabled before retirement.
According to data collected by the nonprofit Council for Disability Awareness, the top five reasons for long-term disability claims are:
- Musculoskeletal disorders (29%)
- Cancer (15%)
- Pregnancy (9.4%)
- Mental health issues, such as depression and anxiety (9.1%)
- Injuries such as sprains, fractures, and strains of muscles and ligaments (9%)
Workers’ Compensation only covers injuries and illnesses that are directly caused by the workplace. Social Security Disability Insurance is another benefit source, but only about 1 in 3 applicants qualify, the average processing time is more than 18 months, and the average SSDI benefit is $1,197 per month.
If illness or injury strikes, you can file a claim for disability benefits with supporting documents from your doctor. After the “elimination” (waiting) period ends, your monthly payments begin. Breeze offers policies beginning at just $9 per month, and you can apply online in minutes.
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Disclaimer: The opinions and ideas expressed in the article are those of the author(s) and are not promoted or endorsed by Bestow or North American Company for Life and Health Insurance®.