As a single mom, you’re used to taking charge and taking care of your family. If you’re looking to take more control over your finances, you don’t need any superpowers or top secrets — you just need to account for these essential parenting expenses when creating your budgeting and saving plans. That way, you can achieve and maintain financial stability for your family.
Budgeting for a New Baby
For moms-to-be, figuring out those initial baby expenses can be a bit tricky. Depending on your health insurance, your delivery may be your biggest expense, but stocking up on the essentials can also put a dent in your wallet. You can keep those last expenses low by looking for coupons, promo codes, and freebies for new parents. From diapers and formula to breast pumps, you’d be surprised at what new moms can score for free.
Saving for Emergencies
As you budget for your baby, or your growing child, you need to think about the potential for financial emergencies. Having an emergency savings fund can ensure that unexpected costs don’t wreck your entire budget, but it can also be helpful to have a backup plan. If you own a home, refinancing your mortgage could be a viable way to access cash for emergencies. With refinancing, your existing loan is replaced with a new one and you get to keep the difference
Renting or Buying a Home
Speaking of homes, deciding whether to rent or buy can be another major financial decision that moms face. There are benefits and drawbacks to both, so research and carefully weigh your options so that you can make the best choice for your family and finances. If you buy, you can build up equity that can be used to take out a loan or refinance to get cash for emergency expenses. Whereas if you rent, you don’t have to worry about depreciation or taxes.
Paying for Childcare
This is a big one, especially for single parents. The average cost of childcare can be higher than college tuition in many states, so budgeting carefully for this expense is essential for maintaining financial stability. Thankfully there are a few ways that budget-savvy moms can save on childcare expenses, like itemizing expenses on your tax returns, signing up for a dependent care FSA or even hosting an au pair from via a foreign exchange program.
Paying Off Old Debts
Debt has a dirty reputation, especially for parents, but it’s important to keep in mind that not all debt is necessarily bad debt. So before you strap your finances paying off all of your debts, make sure you know the difference between good and bad debt, as well as which debts you should pay off first. High-interest credit cards are on the top of that list but you may be surprised to know that student loans and mortgages can actually provide a boost for your finances.
Balancing Retirement and College
Last but not least, you need to think about college and retirement. While most moms may think that saving for college is more important than saving for their retirement, this is one area where it pays to be a bit selfish. Not saving enough for your own retirement could not only jeopardize your financial future but it could also leave your kids having to help you out in your golden years. So really, putting your retirement needs first is not selfish at all. Plus, your children can always find alternative ways to pay for their education, including scholarships, grants, and student loans. If you need help figuring out your retirement needs, don’t hesitate to contact KG Meyer.
Planning out finances doesn’t have to be a pain for single moms. You just need to know which areas to focus on and which moves to make in order to make the most of your money. So, be sure to use this guide and the resources in it to create your financial plan and to create lasting financial stability for you and your children.