Recent events attributed to the COVID-19 pandemic have taken the entire world by storm, and the economic landscape is no exception. If you have lost your job due to the pandemic, you may find that you are struggling to stabilize your finances.
Studies show that over 3.3 million people lost their jobs in the United States because of the pandemic. The economy may soon experience a recession, Greg Draco, chief U.S economist of Oxford University said. “This is not just a blip. We’ve never experienced something like this.”
As global economies took a toll from the pandemic, personal finances have also been greatly affected.
Single parents and divorcees are among those badly affected. Not only do they have to juggle working at home, but they also have to take care of their child in the middle of a lockdown. For some, their jobs had been hit badly by the recent events, causing their finances to become unstable. Thus, in times like these, it is important where we put our hard earned money.
With the current uncertainties the world is facing, it is important to remain emotionally and financially stable for the sake of your kids. Below are financial tips that can help you as a single parent amid the financial challenges you may be facing today.
Tips to Stabilize Your Finances
Embrace the Budget
The first step to becoming financially stable in the middle of a health crisis is to budget your income and actually stick to it in the long term. As a divorcee who pays for all the expenses at home, a budget plan can help you see where you’re spending most of your money on.
With a budget in place, you can then figure out which unnecessary expenses you should cut. Is it really necessary to spend much on electricity? How can you decrease your electricity consumption?
Continue to Pay Your Debts
If you acquired debts before or during the lockdown, continue to pay for them, no matter what. It would be better for you to have debt payments included in your monthly budget rather than to have your debts pile up after the quarantine period.
If you plan to use your credit card anytime soon, do so, as long as you can afford to fully pay your debt when your bill arrives.
Know What You Can Afford
As a single parent, the battle between the wants and the needs may be a little harder to beat. Setting up a fine line between what you need and can afford now and what you can save up for in the future. In the middle of this pandemic, it is important for you, as a single parent, to realize what’s more necessary for your family.
As a single parent, you might feel pressured to see how other families get by with certain lifestyles and spending. Don’t get pressured by that. You’re allowed to build your own life. So strategize in a way that is comfortable for you and within your means.
Automate Your Savings
Apart from the expenses for necessities, another factor that should never leave your budget planning is allotting a percentage of your income to savings. As a single parent, it may be hard to save money, especially when life takes an extra stretch. However, savings–big or small–matter.
One way to make saving “effortless” is to set up an automatic bank transfer for your savings account every time your salary comes in. This way, you would never have to worry about not allotting for your savings, and you can budget the rest accordingly.
Invest in Protective Insurance For You and Your Kids
COVID-19 has taken everyone by surprise and has given people quite the scare, especially parents. Even with the pandemic still ongoing, you can start protecting you and your kids from possible incidents in the future. What the pandemic has taught everyone is to prepare for the worst.
While it may be quite a stretch on your budget, life insurance is not something you should skip. Investing in life insurance for you and your kids will give you more legroom for other financial considerations in the future, like medical or educational needs, shelter, and other unexpected expenses.
Establish a Small Online Business for Extra Income
If you have extra time in your hands (in the middle of taking care of the kids and working full time), consider setting up an online business for extra income for your family. It is recommended to make a business on something you genuinely enjoy, like cooking or crafts making. This way, you can find a hobby that would take your mind off of the pressure life gives. You can also take this as an opportunity to bond with your children or allow them to learn new skills, now that school is indefinitely suspended. However, you must first do a feasibility study on your business ideas to guarantee your return on investment.
Know Where You Can Get Financial Help
While there’s limited help from the government specific to single parents, other types of financial assistance are there for sectors badly affected by the COVID-19 pandemic. For instance, if you lost your job during the lockdown, the government can offer you financial aid.
Also, check if you qualify for financial loans from banks or insurance companies. Take the time to research on, read, and apply for these kinds of assistance. Patience is the key to getting financial relief in these trying times.
Boost the Family’s Emergency Funds
One of the things this pandemic has taught us is that emergencies can happen to anyone; and it can strike when you least expect it. As a single parent with limited people to seek financial assistance from, it’s always best to be prepared.
Aside from filling up your savings account, it’s also important for you to save for emergency funds for the family. Such funds can help you if someone figures into an accident, or your home needs immediate repair. You can afford to pay for these without being short on your budget for the month.
The year 2020 has been a challenging year, so far, especially for single parents. So do not be afraid to ask for help from the people you can genuinely rely on. Being financially stable even in the middle of a health crisis is possible, as long as you strategically plan your expenses and practise healthy money habits.
Emily Harper is an environment, sustainability, health, and women advocate. She is also fond of analyzing home structures and design and has been a Home Stylist and Consultant. She is an active community member, concerning community improvement and security. She loves to write about her two kids, home and living. www.securitydesignhub.com