Being a single mother is perhaps the toughest job of all. Not only are you the sole provider of emotional support and care, but you also have to deal with the finances. Single mothers need to be prepared for all worst-case scenarios. However, the good news is that you can manage your finances if you know what you should do. Here are some great tips that can come in handy for single moms when they are looking to manage their finances:
Who doesn’t like buying new things? When you go out with your kid, it will get awfully tempting to buy everything that appeals to you, but you have to be careful here. No matter how much money you have, you need to spend it wisely. Credit cards are a definite no-no because they will only give you the room to spend more and it will build up your debt. When you don’t physically see the money, it makes it harder for you to realize exactly how much you are spending, but the debt you rack up is very real.
Create a detailed budget
You need to create a detailed budget for keeping track of your spending. This means writing down all the expenses, even something as simple as your child’s haircut. You also need to note down your income and see exactly how much wiggle room you have. Making a list can help you in prioritizing your expenses such as the bills that need to be paid first. You should ensure that all major expenses such as rent, clothes, bills, school fee and groceries is covered.
Assess your financial position
Making a budget doesn’t mean that you know what your financial position is. Assessment of your financial position involves knowing what your assets and liabilities are. Do you have any savings or other assets such as car or property? Likewise, you also need to determine how much debt you have to pay off. Assessing your financial position can give you an idea of what your future moves should be.
Have a safety net
While it can be very difficult for single mothers to save enough that can be invested, you should still save a little amount of your monthly income. Emergencies come without warning and you need to have a safety net that you can use if any such problem arises. Keep this money out of reach like in a separate account so you are not tempted to use it on unnecessary expenses.
Know your tax breaks
There are several tax breaks that can be immensely helpful for single parents and you need to know about them. You can file as head of household because this makes you eligible for a higher standard deduction. Moreover, single parents can also claim exemptions for themselves and every qualifying child against their taxable income. There are other similar exemptions available that can help in saving money.
Use these finance tips to your advantage and provide for your child in the best way possible.