Budgeting for single moms: 8 tips  from a single mom of 2

If you are a single mom, you don’t want to get to the end of the month and wonder where all your money went. Single moms have unique financial challenges, since they often operate a household on one income and must pay for expensive necessities like child care. This makes budgeting and tracking expenses important.

Emma’s quick take on how to set up a budget

To start budgeting, you need to list all your income and expenses, as well as identify spending weaknesses. The next steps involve making a spending plan that lets you have money in the bank at the end of the month.

Whether you are tired of reaching the end of the month, wondering where in the world all your money went, or you have some big financial goals you want to reach, here are some effective budgeting tips for single moms:

1. Track your spending
2. Calculate your income
3. Calculate your spending
4. Cut spending
5. Use bill negotiation
6. Create a monthly budget
7. Track your spending
8. Pay yourself first
9. FAQs about budgeting

1. Track how much money you spend for a few months

The first step to creating a budget that works is figuring out where all your money has been going each month. To do this, you’ll want to break out your last few months of bank statements and credit card bills.

Devote a few hours to adding up all your spending in categories like food, entertainment, transportation, clothing, and regular bills on a per-month basis for the last few months.

If it’s currently August, for example, figure out exactly how much you spent on food and dining out in June and July. And do the same thing when it comes to what you spent in other categories that tend to hit your budget hard.

Tally those numbers up to get an idea of how much you’re spending each month! You’ll need this information once you get to the point where you’re creating your budget for future months. 

If you prefer using apps, options like YNAB can help you create and follow a budget right from your smartphone. However, if you like to write things down, buy a budgeting planner. They come in different sizes and you can look for them on sites like Amazon or Walmart.

2. Figure out exactly how much money you earn

The next budgeting tip I have for single moms is to figure out exactly how much money you bring home each month. This should be easy if you earn a salary but may prove more difficult if you’re paid hourly or rely on a lot of overtime. Income includes:

• Salary
• Overtime
• Tips
• Bonuses
• Side gigs
• Child support
• Alimony
• Benefits like housing allowance or food stamps

If you can’t figure out exactly how much you earn, try to come up with a minimum amount of money you earn in any given month. If you sometimes have 5 weekly paychecks in a month but usually just 4, for example, create your budget based on four pay periods. Or, if you sometimes earn extra commissions but not always, plan your budget based on your lowest income months.

If you happen to earn more in any given month, you can treat it as “extra” money and allocate it toward debt repayment or savings this month or next.

3. Figure out exactly how much money you owe

I suggest using a nice third-party app like Mint or YNAB that will pull in all your accounts, including credit cards, saving and checking accounts, car notes, student loans, mortgages and even personal loans into one place.

Be honest with yourself and add ALL your accounts! No cheating! These apps will give you a snapshot of what is coming in, what is going out and the real figure of your DEBT.

4. Cut spending

Now that you know how much you earn (or approximately how much you earn) and how much you’re spending each month, it’s crucial to look for areas to cut, especially during times of economic uncertainty, like a recession.

Maybe you found out you’re spending $500 or more on dining out each month and know you could easily cut that in half with a little meal planning. Or perhaps tracking your spending helped you realize you’re spending way too much on clothes for the kids or yourself.

5. Use bill negotiation services to manage your bills

Bill negotiation services are a quick, free way to identify and cancel recurring subscriptions you no longer need or want, and lower your monthly utility bills. 

For example, Truebill will negotiate better deals for more than two dozen kinds of services, including Amazon, Netflix, Hulu, Time Warner cable, Audible, Spotify, gym memberships, insurance policies and internet. Truebill saved me $16 off my AT&T bill and got me a better plan, to boot. The app also saved me $23.20 per month on my TimeWarner/Spectrum Internet plan.

You can also compare rates among different companies for auto insurance, life insurance, homeowner’s insurance, and other insurance products you buy. This can also help you lower your bills and free up room in your budget.

6. Allocate all the money you earn on paper at the beginning of the month

At this point, you should be fully aware of your income, your spending weaknesses, and how your current spending might be impeding your ability to save. With those details in mind, it’s time to sit down and create a monthly budget for the following month.

How to make a budget

1. On a sheet of paper, create two different columns — one for each bill or estimated expense and another for how much it costs. 
2. At the top of the page, list your monthly take-home pay so you can reference it when you need to.
3. At the top of the page, list all of your regular recurring bills — like rent/mortgage, utilities, car payments, and insurance. (Later on, we’ll talk about ways you can reduce the cost of those recurring bills, with help from apps like Truebill.)
4. Create a list of estimated expenses you’ll need to cover for the month — for example, how much you plan to spend on food and dining out, gas to get to work, and entertainment for the month.
5. Keep an ongoing tally of how much these add up to, then see what’s left. At this point, you’ll want to allocate any additional funds to savings, investments, and debt repayment.

If you’re unsure how much money to save, that’s totally normal. Keep in mind that, if you have high-interest credit card debt, you’ll want to allocate as much of your income as you can toward debt while also saving for the future. Considering the average credit card interest rate is well over 17%, any credit card debt you have should probably be tackled first.

Single mom budget example

Here’s how a monthly zero-sum budget might look for a single mom with a take-home pay of $7,000 per month after taxes and 401(k) contributions:

Bills	Amount budgeted
Mortgage or rent payment	$1,550
Car Payment	$480
Groceries and dining out	$700 (estimated)
Car Insurance	$150
Utility bills (electric, gas, and water bill)	$400 (estimated)
Dance lessons	$250
Piano lessons	$140
Clothing	$200
Credit Card #1	$400
Credit Card #2	$250
Credit Card #3	$1,000
Savings	$1,480
Total budget amount	$7,000

Keep in mind that the example budget above is just that — an example. Your budget may look totally different depending on how much you earn, how many kids you have, and other variables.

7. On paper, pay all your bills and expenses until your income is gone

Keep in mind that the example budget above is just that — an example. Your budget may look totally different depending on how much you earn, how many kids you have, and other variables.

The key is making sure you list all your bills and fluctuating expenses along with savings and investments each month. Spend every dollar you earn “on paper.” 

As the month goes on and you get paid, pay bills and expenses according to your budget and check each of them off as you go. When it comes to estimated expenses like food and transportation, you’ll need to track those categories throughout the month to ensure you’re staying on track with your spending goals.

At the end of the month, you’ll see how you did, and have the opportunity to tweak your monthly budget so it works a little better the following month.

Remember: This is an art and a science, and no one is perfect. Bills fluctuate, expenses come up unexpectedly, and income can go up and down. Be kind to yourself, but also realize that the stricter you are with your budget, the more joy and freedom it will ultimately afford you.

8. Pay yourself first

“Pay yourself first” means that you prioritize your financial security and long-term goals before your whims and short-term goals. 

I elaborate on the basics of investing to build wealth and having a basic savings account for unforeseen expenses. It is also important to model good financial habits for your kids — you can learn and reach goals together.

Savings rates are super-high now:

But the importance of paying yourself first, prioritizing your financial wellbeing above new clothes, a home reno or fancy car, is really about establishing good habits and a foundation of security from which you can build any life you can dream of.

FAQs about budgeting for single moms

What does a budget do for single moms like me?

A budget is an important part of understanding how much money you make, and where that money goes. A budget can help you find ways to spend less money, save and invest your money, and enjoy your money on things that are important to you.

For single moms, a budget can help you focus on growing your income and stop being dependent on child support and alimony. 

What is the 50/30/20 budgeting rule?

Senator Elizabeth Warren popularized the so-called 50/20/30 budget rule in her book, All Your Worth: The Ultimate Lifetime Money Plan. The 50/20/30 budget rule is to divide up after-tax income: 

• 50% on needs
• 30% on wants
• 20% to savings

Using this method makes budgeting less complex since it only uses three categories. These categories also tell you exactly where the money goes. Taking care of your needs, treating yourself to some things you want, and saving for the future is a great start.

How can I budget on a low income?

Budgets are especially important if your income is low — an outline of where your money goes, and where you want it to go, can help you stretch all your cash. This helps you feel in control and make decisions each day to make the most out of your income. We created this guide for single moms looking for low-income resources.

Getting Started: How to Make a Budget
byu/zonination inpersonalfinance

The bottom line: My best budgeting tips for single moms

Here are my top 3 budgeting tips for single moms:

1. Track your spending

If you’re tired of wondering where your money goes every month, the time to give budgeting a try is now. Maybe a budget is exactly what you need to start paying down debt and reaching your financial goals. Try a free trial of YNAB to get started now.

2. Consolidate your debt

Whether it means refinancing your student loans, paying off or transferring your cards into a 0% credit card, refinancing your home to pay off debt, or otherwise managing your balances and interest rates to streamline what you owe, making it simple often also saves you money. Here is my step-by-step guide to paying off debt — for good.

3. Have a goal

Humans are more productive when they are working towards something. Instead of just focusing on a zero debt balance — which is a wonderful goal — focus on the next step. What does that achievement get you? Does it mean you can qualify to buy a home? Help pay for your child's college? Go on a much needed vacation?

Or, maybe now that you have extra cash flow, it is time to save for and invest in retirement? Want to get your finances in order? Earn more, pay off debt and stop stressing? Join my 52-Week Money Challenge now! 100% free!