Do All Single Mothers Struggle Financially?
Do All Single Mothers Struggle Financially?
Every single mother needs to make it their mission to get financial education and master how to manage, save, and invest their money.
Financial worries are known to be the number one contributor to stress, health issues, and unhappiness in a single mother’s life. Do all single mothers struggle financially?
No, not all single mothers struggle financially even though most people believe that is the case. The single mothers who have taken the time to learn how to make more money, manage, save, and invest it do well financially.
So, you may be wondering next, why are some single mothers in poverty?
Why Are Some Single Mothers In Poverty?
Some single mothers are in poverty because of a lack of sufficient income, financial knowledge, money management, and investment skills, limiting money beliefs, confidence, affordable housing, and bad or no credit history.
Single mothers also tend to have higher financial obligations leading to high consumer debt with sole custody of the children.
Next, let’s discuss some financial survival tips for single mothers.
How To Survive Financially As A Single Mom
One of the biggest worries of every single mother is whether there will be enough money to meet all the monthly financial demands and obligations. If you
have become a single mother recently know that you will be okay.
Always remember you are powerful and can achieve anything. Here are 8 tips and insights to help you survive financially and not struggle.
Work on Your Money Mindset
Identify and work on your relationship with money, and limiting money beliefs. You form beliefs about money in your childhood by observing how your parents felt about money, and how they handled it.
These beliefs then lead to your thoughts about money, feelings, behavior, words, actions, habits, and eventually your money destiny. It is important to have the right mindset or none of the other suggestions will work for you if you have limiting money beliefs.
For example, if you grew up in a household where your father worked, was the breadwinner, handled all the finances and paid all the bills and your mom did not work then you may believe that men should provide the money and are better at handling the finances.
Chances are high that you may struggle financially with that programming, and a lack of male to provide for you as a single mother.
Learn to believe in your own ability and know that you are powerful and can do anything you put your mind to. Handling your finances is not complicated and always remember who you are is bigger than any problem out there.
Know Your Numbers
Know your current financial state making sure that you know all your numbers. Make a note of all your savings and current investments.
Write down all the money that is coming in like your income and how much exactly is going out as expenses (fixed and variable). Make a note of every dollar that you spend for the next 3 months. Do this exercise at least twice a year during different months in a quarter.
This will give you a good idea of how much money you are spending in the different categories like food, transportation, rent/mortgage, utilities, etc.
Figure out if you are saving and have a positive balance at the end of the month or spending more than you make and have a negative balance.
Review all your expenses and identify any expenses that are unnecessary and can be eliminated. For example, are you paying for any monthly subscriptions that you can eliminate and cancel?
Have A Peace of Mind Account
Start a peace of mind account and make it a priority to save an amount equivalent to your one month’s worth of all your expenses as quickly as possible.
Continue to save towards this goal along with meeting all your other suggested steps below until you get to 12 months’ worth of all your expenses to cover you and give you peace in case of a job loss or any other reasons for a financial setback like a pandemic.
Have A Spending Plan
Create a spending plan with all the categories in which you currently spend money. The exercise that you did in knowing your numbers will help you determine how much money to anticipate spending on all of your fixed and variable expense categories.
In general, aim to have about 55% of your take home income allocated to your necessary expenses, 10% to your financial independence account (money saved for investing, growing for financial freedom), 10% to long-term savings (vacation, big purchases), 10% to your education (learning high income skills, personal growth, 10% to fun, and 5% to give back.
This allocation and percentage per category is a suggestion. Start with what you can afford initially even if it is 1% of your take-home pay as forming the right healthy money habits is important.
If you have any debt start paying it off. You can choose to pay off the smallest amount owing first or the amount with the highest interest first.
Consistently have some money going towards your debt and start decreasing it because the interest that you pay on debt could be devastating financially and prevent you to achieve financial independence.
You can also try to reconsolidate all debt and have one loan or line of credit with a lower interest to pay back. Also, try renegotiating any of your monthly financial obligations and applicable interest rates.
Save And Invest Regularly
Automate monthly saving and investing as much money as possible. Make it a priority and commit to learning about different ways to invest your money for your future and your children’s future.
Start teaching and talking about money with your children at an early age so they know how to be financially independent too.
Make More Money
Figure out ways to make more money so that you can have more money to invest and multiply. You are limited as to how much money you can save however you are not limited with how much more money you can earn in your own business in comparison to getting 2-3% raises once a year in a job.
Start a side business that best suits your lifestyle. There are plenty of resources available for you to figure out what type of business would work best with your schedule, responsibilities and the skills you would need to learn.
You can also find things around the house that you no longer use and sell them on the Facebook marketplace and generate some extra cash to save and invest.
Get Life Insurance
Buy term life insurance equalling ten to twelve times your current salary or whatever your annual earnings are so that your children are well taken care of financially in case something happens to you.
You can name someone you trust as a trustee for the money in case your children are minors.
Make A Will
Hire a lawyer to draft a will so that your estate can be transferred to your children without any battles and delays. Remember to stipulate who you want to look after your children especially if they are under the age of 18.
You do not want the courts to decide what happens to your children in case of your death. If your kids are old enough have a conversation with them about where they would want to live and have them involved in your estate protection plan.
In conclusion, you do know that not all single mothers struggle financially even though most people believe that is the case. The single mothers who have taken the time to learn how to make more money, manage, save, and invest their money do well financially.
Some single mothers are in poverty because of a lack of sufficient income, financial knowledge, money management, and investment skills, limiting money beliefs, confidence, affordable housing, and bad or no credit history.
8 ways for single mothers to survive financially are to work on their money mindset, know all their numbers, have a peace of mind account, have a spending plan, save and invest their money regularly, make more money, get life insurance, and make a will.
Next, read can single moms build wealth for further helpful tips and insights.