As a mother of two, I know how difficult it can be to stay on track and stay within budget. But as a single mother, I can imagine it’s harder. Having one income and many people to care for means you have to spend every dollar carefully. It’s all about being a mom on a budget!
While I encounter a lot of real people’s budgets, some of my favorites are those that come from single moms. Everything in their lives revolves around their children, and I see that even in their budget. They want to make sure that every penny they can goes toward making their children’s lives as better and more enjoyable as possible.
Creating a budget for a single mom is not your typical budgeting situation. There are a lot of expenses to consider when there is a child in the picture. And you need to be more creative with allocating your money when there is only one income you can rely on.
That’s why I want to help as many single moms as possible with their budgeting skills so they can get ahead in the financial game.
While I say “single moms,” just know that this information applies to all single parents and guardians out there. These tips and budget plans are designed for anyone with a single income who needs to care for one or more children.
Tips for moms on a budget
Before you sit down and create a single mom budget, there are a few things you should take into consideration. These tips will help you ensure you allocate money properly and make the most of your income as a single parent.
1. Get out of debt
I put this first because it is very important. I don’t have to tell you how scary it is to be in debt. Of course, there are different types of debt. Interest rates on mortgages and cars are usually lower, while credit cards are considered high-interest debt. I love that single moms focus on getting rid of their high-interest debt.
Getting into debt is expensive! Interest on debt accumulates quickly, making your debt payments much higher than they were to begin with. The faster you get out of debt, the more you save. Then, the money you normally use to pay off debt can go elsewhere, such as your retirement fund or a child’s education.
2. Save an emergency fund
Emergency funds are even more important for parents. Double that for single parents! If you lose your source of income, there will be no other parent you can rely on for support. Therefore, you should have a significant amount of money saved for these emergency moments. Maternity leave is a great time to start Saving Money.
At a minimum, you should have at least three months of total household expenses. This is something you should work on at the same time as you work on paying off debt. Ideally, you want to have that number of expenses for six months, but three is a good starting point.
3. Take advantage of sinking funds
As part of your budget, I recommend contributing spending money. Sinking funds are easily accessible savings accounts where you store money that you will use in the near future. Sinking funds are usually for things like car repairs or vacations.
As a parent, you can use this sinking money to account for things like birthday gifts, back-to-school shopping, family vacations, school activities and unexpected trips. The idea is to contribute a little each month to a sinking fund so the money is there when you need it.
Unlike an emergency fund, it’s meant to be used regularly! Spending money is great for everyone — not just the mom on a budget.
4. Find free entertainment
When you’re a mom on a limited budget, one of the first things you should do is entertain. Although you may not be able to get a large amount of money to spend at amusement parks, aquariums, or zoos, you can still have a lot of fun on a limited budget.
Check out this list of low-budget activities you can do to keep you and the kids busy on weekends and weeknights! Also consider enrolling your children in low-income activities such as Boy Scouts, the Boys & Girls Club, and community sports.
5. Write down your bills
As a busy mom, I know how easy it is to miss important dates if you don’t write them down. So, I like to keep a calendar just to track bill payments. Make a note of when each bill is due so you don’t miss a payment (this could affect your credit score).
If possible, automate bill payments for as many as possible. This will save you the time and stress of missing payments.
6. Saving for the future
It’s easy to only think about the present when you’re dealing with just one income, but it’s always important to put some money into savings, even if it’s just $20 a month. Once you pay off high-interest debt and have an emergency fund, you can start saving.
Think about long-term goals for you and your child(ren). This will likely include their education and your retirement.
If possible, automate savings. This is where your bank automatically takes a predetermined amount from your checking account and moves it into savings. It’s an easy way to save the bare minimum every month.
With long-term savings, investing is a good idea! The earlier you start investing, the better. Your investments grow over time as you accumulate money.
7. Find extra income
It is very difficult for several people to live on one income. If you find that you are not earning what you want, there are many different ways you can earn income.
First, you should look for passive income. This is the income you earn even while you sleep!
Then you can consider getting a second job or side hustle. These are things you can do in your free time when you’re not doing a full-time job or when you’re not a mom.
Another option you should 100% consider is tax credits. Take advantage of everything you can as a single parent with dependents.
Create a budget that works for you
Now it’s time to roll up our sleeves and set a budget. Here’s exactly how to be a mom on a budget!
1. Income statement
This first part is the best part – list all your sources of income (after taxes). Each source of income should have its own line in your budget. This should include funds from:
- Full time work
- Side hustle
- Investments
- Alimony
- Child support
- No government funding
2. List of expenses
This is the not fun part. You will list all your expense categories and the amount you spend on them each month. Remember, this is for you and your child(ren). It’s important to prioritize your spending on the categories that matter most.
You’ll need to consider your child’s priorities, too. They may not need to be part of the school’s hot lunch program, but they can still participate in field trips.
Here are some expenses you should consider when creating your budget:
Fixed expenses
- Rent/mortgage
- Insurance (health, life, rental, homeowners, auto, etc.)
- Utilities (water, electricity, internet, home phone, etc.)
- cell phone
- Subscription services (Spotify, Netflix, Amazon Prime, etc.)
Variable expenses
- clothes
- grocery shop
- Eating out (lunch money)
- Childcare (daycare, babysitting)
- entertainment
- School supplies/activities
- Outdoor activities
- Custom
- Pets
- Gas
- Beauty/beauty tools
Savings and debt
- Sinking money
- Emergency fund
- the retirement
- college
- Long term goals
- Student loans
- Credit cards (list each)
- Car payments
- Medical bills
3. Reduce expenses
When you first start out, it takes a bit of playing to get all the numbers right. You either want to make sure that your expenses are equal to your income or slightly less. If you have expenses that are a little lower than your income, you can leave it as it is to buffer room and push any remaining money toward debt or savings.
In fact, there’s a lot you can cut back on (especially as a single mom on a limited budget). This usually starts with areas like dining out, entertainment, and subscription services. But you can also try to change your other major payments by doing things like negotiating your bills.
When you’re paying off debt, it’s important to live productively. Remember, debt is only temporary, and once it is settled, there will be more cash flow.
However, if you continue to live below your means, you avoid lifestyle creep. Regardless of your income, you should continue to budget so your money is being spent in all the right places.
Final thoughts on single mom budgeting
Now you are ready to be a mom on a budget and create your own budget for a single mom. The first one is the hardest to do, then it gets easier over time!
