For single parents, it seems like there is a never ending amount of expenses incurred each month and having money left over to invest is often impossible. Most single parents shoulder the bulk of the child care expenses, even if they are receiving some form of child support. Children cost a small fortune to raise and often child support does not cover all of the extras, like dance lessons, sports, birthday parties, camp and other items the children need.
So how can a single parent get ahead financially? Fortunately there are ways for even the most cash strapped parents to develop new habits that will get them on the road to financial security.
Here are three ways to prosper in the new year:
1. Pay yourself first. You may laugh at the suggestion of being able to put aside part of your paycheck for yourself, but it is possible with some careful planning. The trick is to allot a specific percentage of your paycheck every week and automatically deposit it into a savings account. Make that the first payment you make, even before paying the bills. You may only be able to devote a very small percentage at first, but you will gain satisfaction watching your little savings account grow each month.
2. Record everything you spend in a typical week. Don't forgot to include money spent on incidentals, like coffee. An easy way to do this is to get a receipt for everything you buy and then tally it up at the end of the week. You may be shocked at how much you spend on fast food, Starbucks and other non-essential items. You don't want to completely cut out all of your guilty pleasures, just cut back on how many you indulge in.
3. After you have taken inventory and know now exactly how much you spend each month , you can develop plan to cut back. For example, if you decide to eat out once a week instead of two, take the money you would have spent on that second meal and put it into a jar. After a few months, take out that jar and now divide it equally into three sections: one third of the money is for investing, one third for your savings account and the remaining third is for you. Get a massage, buy a new outfit or spend it on something that you enjoy. As single parents we tend to spend most of our money on our kids and it is important to have some funds available to treat yourself with. Knowing that you are investing in your financial future and also taking care of yourself and your kids, you will gain control over your finances and your life.