How to Manage Your Finances as a Single Mother

How to Manage Your Finances as a Single Mother

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If you’re a single mother, you understand how hard it gets to pay bills in a timely manner while saving up for emergencies pertaining to your children. Since you are the only one providing for your children, you will need to be disciplined with your money and distinguish between your wants and needs. If you can do that, then you can start creating savings funds for different scenarios.

Establish a savings fund

One important thing you must do is establish a savings fund that will enable your children to afford at least the bulk of their college costs when they leave high school. This benefits you because you will not have to take out hefty loans or dip into your retirement funds to pay for a college education. If your children are teenagers and work, have them contribute some of their earnings to the fund.

Start an emergency fund

The next thing you should do is start an emergency fund for yourself and your children. Emergencies will happen, and you don’t want to go into debt to pay for the emergencies. You should take out between ten and fifteen percent of your check every week or two. By the end of the year you should have a sizable amount of money available.

Get health insurance for yourself and your kids

Since medical bills cost a lot out of pocket, it is important that single parents purchase health insurance for themselves and their children. Sign up for your employer’s health insurance if it’s offered, or you can purchase private insurance.

When searching for health insurance, you want to examine the benefits offered by each insurance provider. Also look at the copay amounts you would have to pay after the insurance provider covers the first portions of your services. For low income families, you can apply for your state’s Medicaid benefits.

Consider a 401K plan

You want to get your retirement savings in order because at some point you will stop working. You will then need enough money to survive off of. If you’re not familiar with 401K plans, here is how it works.

The 401K plan is a retirement account where money is deducted from your check by your employer to help you save for retirement. The funds in your 401K plan are not taxable until you take funds out after retirement. You can also open a regular savings account that will help you prepare for retirement.

Finally, you want to set a budget so that you will live within your means. When you follow the above mentioned steps as a single mother, you and the children can live comfortably.

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