Getting Your Finances in Order as a Single Mother
Life can be tough as a single mother, especially when it comes to managing your finances. You will want to provide the best possible lifestyle for your child filled with fun as well as manage your own lifestyle comfortably. This can be hard to do for a single parent, even on a healthy salary, which is why it is helpful to know how you can get your finances in order so that you can really make the most of every dime. This post will look at a few of the best ways to get your finances in order that will hopefully help you to create a fun, happy, and healthy lifestyle for you and your child.
Establish Income & Outgoings
The very first step to take will be to work out what your total household income is. This could include payment from your job, child support payments, and any other kind of money that you have coming in. Next, you will need to total your regular outgoings. This will allow you to see exactly where your money is going each month and whether or not you are living within your means. You can then go through all of these regular outgoings to see if there are any areas where you could be making savings, such as cutting unnecessary subscriptions or buying a cheaper version.
Create a Budget
Many people struggle to manage their finances each month because they do not have a budget in place that controls their spending. One of the simplest – and most popular – household budgets is the 50/30/20 rule. This involves 50% of your take-home pay going towards essentials (rent/mortgage, bills, and food), 30% towards non-essential spending (clothes, days out), and the remaining 20% used to clear debt or put in savings. You can adjust the percentages accordingly, but it is a smart way to control your spending and improve your finances.
Consolidate Your Debts
If you have multiple debts (this is very common these days), it can be hard to keep pace with these, and you won’t want to fall behind on your payments. One way to simplify your debt is with a debt consolidation loan, which combines your debts into a single payment each month. It could even work out to be cheaper than paying multiple debts each month. Just make sure you crunch the numbers and make sure that it’s financially sound to consolidate your debt. In some cases, origination fees and repayment terms can make the cost of the loan repayment higher in the long term.
Create an Emergency Fund
As you begin to control your finances and hopefully free up some cash each month, you should then work to create an emergency fund. This is a fund that will contain three to six months (or longer depending on how you feel) worth of expenses that can be used in an emergency, such as if you lose your job or if there is an unexpected household repair. An emergency fund can prevent you from using debt in the future and can give you peace of mind knowing that you can manage if an emergency arises.
These are a few of the best steps to take that should help you get your finances in order and create a happy and healthy lifestyle for you and your child.