Do you know, on average, how much it will cost you to raise one child to age 18? More than $245,000 for a child born in 2013, according to the U.S. Department of Agriculture’s annual “Cost of Raising a Child” report. It’s a daunting figure, regardless of your marital status, and if you’re a single parent, you would be totally justified in feeling overwhelmed.
Although the USDA’s report doesn’t differentiate between the costs for a single-parent family versus a double-parent family, it’s probably safe to assume that when you’re doing it alone, some expenses will likely be higher.
Saving money is important for all parents, and especially so for single parents who are wholly responsible for their family’s financial and physical well-being. Although there’s no recipe that works for everyone, here are some basics that can help single parents save money and manage costs:
1. Budget like your life depends on it
With one steady income, it’s vital that you know how you’ll spend every penny you make. If you’ve never done a budget before, it’s a must when you’re a single parent.
Gather all your fixed monthly bills, like rent or mortgage, utilities, groceries, and gas. Grab your pay-stubs for the month and documents relating to any other income sources, such as child support or alimony.
Now find a good online budget calculator and start plugging in numbers. At the end of the exercise, you should have a better understanding of how you’re currently spending money and where you can save.
2. Focus cost-cutting on the places where it counts
Eliminating extras is one way to save money, but you should also look to reduce the cost of necessities too. Saving money means making choices, and some may not always make you popular with your kids.
For example, the kids may want the latest designer clothes right off the rack from the priciest retailers, but when you consider how fast children grow, you may decide to shop the sale racks, or that clothing from the local discount store make better money sense.
Instead of a vacation at an expensive theme park, this year’s family getaway may be a trip to visit relatives in a fun location. The money you’d like to put toward eating out every month may be better spent at Sam’s Club or Costco on bulk groceries to make meals at home.
3. Don’t let saving money derail your savings accounts
When money is tight, it can be tempting to cut back on saving for retirement, building an emergency fund, or saving for college. But you should look at all of those things as non-negotiable monthly costs, similar to your rent or mortgage.
You absolutely must pay yourself by saving for the future.
When you have to make a choice, single parents should prioritize retirement over college savings. After all, college tuition can be covered by loans, while retirement cannot.
Take advantage of retirement and college-savings plans that have tax-deferment benefits; they’ll help you lower your tax burden today while saving for tomorrow.
4. Remember, you’re not just saving money now: you’re teaching kids good money habits
Saving money as a single parent is important, but not just because money can be tight. Studies have shown that the best way to teach children good financial habits is to model them yourself. When your children see you saving money, investing wisely, and working toward the future, they’ll learn the importance of doing the same things when they’re on their own.
When you’re a single parent, you have a lot to juggle. With some financial planning and smart saving tactics, you can make your dollars go farther, stress less about money and spend more time savoring the joys of parenthood.