Becoming a single parent after a few (or more) years of marriage has its good and bad sides. You might finally feel free, especially if things were not going so well with your ex-spouse. On the other hand, being a single parent can lead to financial challenges that you have to overcome. Costs as a single parent tend to increase as parents begin to navigate their new life post-divorce, and it is important to understand how to budget effectively.
Defining your post-divorce budget can become tricky, and you might have to give up on some less important expenses. Let’s see the best tactics and methods to revise your costs as a single parent.
How to Revise Costs As a Single Parent
Make a List of Your Current Income and Expenses
The very first step you should do is to grab a piece of paper and write down all your income streams and costs. Income streams should include your salary, investment income, child support, etc. On the other hand, start the expenses list with the most expensive ones. For instance, it could be your credit card debt, mortgage, and insurance. Then, finish the list with cheaper costs like commuting costs, education, and food. After you create the list, it is time to start changing it by dividing essential spending and extra spending.
Essential Spending vs. “Extras”
In order to prevent overwhelming financial stress, you should define which costs are preferential. Usually, this part of your list should contain things such as housing, utilities, insurance, and child care. Besides that, you will have to pay for groceries, phone and internet service, gas, and, most importantly, savings. Every single parent should put a few bucks each month into the emergency fund. Unexpected expenses such as illness or car repair can always happen, and you need to have a substantial amount of money for these situations. On the other hand, extra expenses can also include entertainment, shopping, traveling, a gym membership, etc. However, it would be best if you don’t give up on all these things unless you have to. Instead, pick those that you like the most and ignore the rest. Very soon, your budget will start looking bigger, only because you gave up on a few unnecessary expenses.
Create Your New Budget and Stick to It
Once you are done with making your list, set your monthly targets and create your budget based on it. Those targets should be deeply correlated to your overall financial goals. After a month or two, you will see if there is room for improvement or not. It might seem that you are still not saving enough even if you get rid of some unexpected costs. In that case, figure out what else you can do to save even more money. For instance, stop eating out for lunch or try to cut some other luxuries. Once you correct your budget (after a month, for example), try to stick to it as much as possible. It is essential not to make exceptions too often – do it only when it is urgent (health issues, home or car repair, etc.).
Pick the Right Insurance Policy
Be aware that there is no individual policy that is the best for every single parent. Another important factor is your resident country – similar insurance policies can vary in different countries and states. Therefore, after you decide what type of insurance should fit your situation the most, do your research and compare all private health insurance policies. Also, don’t hesitate to ask as many questions as you need in order to find out all the details that interest you. Talk to professional companies and agents, but also speak to your friends and family members that also had the same situation.
When it comes to savings and freeing up the cash in your budget, it is crucial to recheck every possible opportunity and alternative. First of all, consider switching your bank account if it is necessary. Review the fees of every single bank, compare them, and find the most suitable option. On top of that, try to leverage your credit card rewards to the maximum. For instance, if you spend the majority of your money in grocery stores and gas stations, find the card that offers the best cashback for these purchases. On the other hand, if you travel with your kids quite often, then focus more on travel rewards. And finally, think about your childcare costs. First, decide whether you need daycare assistance or not. If one of your family members is willing to take care of your child, then there is no need to spend money on it. A childcare swap with another mom is also an option if she has a schedule opposite to yours.
Divorce always brings numerous challenges, and as a single parent, you have to respond adequately to each of them. To revise costs as a single parent, make your expense list, define your new budget and savings options, and stick to it as much as possible.
Lauren Laporte is a health writer at ripped.me. Her favorite subjects revolve around mental and physical health, and how they inevitably affect each other. Inspired by mountains of research and the latest in the fields of nutrition, neuroscience and cognitive science, she’s motivated to inform people of just how much they’re all interconnected. She’s into both nature and nurture and believes that to be the main message her writing is sending out. www.ripped.me/author/lauren-laporte