Top budgeting tips for single parents


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If you’re a single parent, you probably carry a lot of weight on your shoulders. From paying for clothes to putting a roof over your children’s heads, all — or most — of it likely comes down to you. You may find it challenging just to make ends meet, and put off things like paying off debt or saving for the future.

Fortunately, there are ways to make it easier to manage as a single mom or dad. Even taking a few simple steps, like setting up a simple budget and automating your finances, can improve your bottom line and help you feel more in control of your money.

Read on to learn key financial tips for single parents.

Related: Tips for becoming financially independent

9 Ways to Budget As a Single Parent

1. Crunching the Numbers and Creating a Single Parent Budget

A great way to get a better financial path is to first figure out where you currently stand and come up with a monthly budget. You can do this by gathering your financial statements for the past several months, then using them to figure out your average monthly income (after taxes), including any child support or alimony you receive.

Next, you can tally up your fixed expenses (monthly bills) and variable expenses (clothing, food, entertainment) to see how much, on average, you are spending each month.

Ideally, you want your monthly inflow to be larger than the outflow — that way, you have money left over for savings and paying off debt. One budgeting rule of thumb is the 50/30/20 ratio, which divides your income into three parts: 50% for needs, 30% for wants and 20 for savings and paying off debt beyond the minimum.

If your current income isn’t high enough to make that work, you can re-jigger the percentages and come up with a spending and saving plan that works for you.

2. Trimming Expenses in Your Single Parent Budget

If you find yourself breaking even or, worse, going backward each month, you may next want to look hard at your list of expenses and start searching for ways to save money. A key single-parent budgeting move is to hone in on your recurring bills to see if there are any ways to lower them. You might be able to switch to a cheaper cell phone, for example. Or, maybe you can find a better deal on car insurance or ditch your cable subscription.

You can also look for ways to cut everyday spending, such as breaking a morning coffee shop habit, cooking more often and getting less take-out and using coupon apps (like Yowza and Coupon Sherpa) whenever you shop for food and other household items.

3. Opening an Interest-Bearing Account

Once you start freeing up some money each month, it can be a good idea to start siphoning it off into a high-yield savings account. This can help you create some financial security for your family, as well as help you reach short-term goals, like going on a vacation or putting a downpayment on a home.

Even if you can only afford to set aside $25 or $50 per month, it will begin to add up.

Some good places to stash cash you may need in the next two or three years include: a high-yield savings account, an online savings account or a cash management account. These accounts typically earn more interest than a standard savings account, yet allow you to have easy access to your money when you need it.

You may want to keep an eye out for fees, and shop around for financial institutions that won’t charge you monthly and other account fees (which can take a bite out of your hard-earned savings).

4. Prioritizing Emergency Savings

Expensive problems you can’t plan for often come up, like a car or home repair, taking a child to urgent care, or a sudden loss of income. Without a cushion, small money problems can quickly balloon into big ones if you are forced to run up high-interest credit card debt to deal with them.

As you start building savings as part of your monthly single-parent budget, it can be wise to prioritize emergency savings. Experts often recommend having at least three to six months’ worth of living expenses stashed away in a separate savings account where you won’t be tempted to spend it. That way it’s there when you need it.

5. Paying Off Your Credit Cards

Eliminating even one high-interest credit card debt can make a significant change in your monthly cash flow. When creating a budget for a single mom (or dad), it can be a good idea to leave room for credit card payments that are higher than the minimum.

You may want to start with the debt that has the highest interest first since borrowing from those creditors is costing you the most money. However, if you’re likely to get discouraged because it’s taking a long time to pay off that debt, you can start with the lowest balance debt. Getting some small debts paid off may motivate you to keep going.

Whatever debt you target, you can then pay more than the minimum payment on that debt while continuing to pay the minimum on others, with the goal to eliminate them one by one.

6. Planning for the Future

Once you’ve mastered your day-to-day finances, you may want to look toward your two big long-term financial security goals: retirement and your children’s college education. If you can’t comfortably save for both at the same time, you may want to begin with retirement. While your kids can likely get loans for college, there aren’t loans for retirement.

You may want to start by contributing to any employer-sponsored 401(k) plan. If your employer is matching contributions, it can be a good idea to chip in at least enough to get the match (otherwise you’re turning away free money!). Or you can set up an IRA; even $25 or $50 a month at first is a start.

When you’re in the habit of regularly contributing to a retirement savings account, you may want to turn your attention to saving for college: An ESA (education savings account) or 529 college savings fund can help you save towards college expenses while getting a tax break.

7. Automating Your Finances

As a single parent, you may be super busy, making it easy to pay bills late simply because you forgot. Automating your finances can simplify your budget (and your life) and help ensure you don’t get slapped with expensive fees or interest charges for being late with payments.

A good place to start is to set up autopay for all your recurring bills, either through your service providers or your bank. This way you don’t have to stay on top of due dates and remember to make every payment.

Automating can also be a great idea when it comes to saving. Often referred to as “paying yourself first,” you may want to set up an automatic transfer of money from your checking to your savings account on the same day each month, perhaps right after your paycheck gets deposited. This prevents you from spending those dollars or having to remember to transfer the funds to your savings at a later time.

8. Increasing Your Income

If your budget is super tight even after cutting expenses, then you may want to find ways to increase your income. This can help take a lot of the stress off budgeting as a single mom or dad.

There are many ways you can increase your income. For starters, if you’ve been at your job for a while and are performing well, you may want to consider asking for a raise. It can be helpful to research what the industry average pay is for your position with your experience to get an idea of how much you should ask for.

Another way to increase your income is to start a side hustle, like walking dogs, becoming a virtual assistant, taking on freelance work in your profession, selling your crafts, becoming a tutor, caring for other people’s kids, or offering music lessons.

9. Taking Advantage of Tax Breaks

When you’re budgeting as a single mom or dad, it can be smart to be aware of all the tax benefits you may be entitled to. A tax credit is directly subtracted from the amount you owe in taxes, while an exemption means that amount is deducted from your total income before your taxes are calculated.

Here are a few tax benefits that may be worth investigating:

  • Filing as “Head of Household” instead of “Single.” If you meet the requirements, you may be able to get a higher standard deduction.
  • The child tax credit. If you share equal custody with your child’s other parent, only one of you can claim this. You may want to consider alternating years.
  • The earned income tax credit. Single working parents with low to moderate incomes often qualify.
  • The child and dependent care credit. If you’ve been paying for childcare so that you can work (or look for work), you may be entitled to this. But only one parent can claim it each year.

The Takeaway

Budgeting as a single mom or dad can be challenging. With some simple financial planning, however, you can start to feel less stressed about money and get closer to both your short- and long-term goals.

Key steps for single moms and dads include taking a close look at your monthly cash flow, trimming expenses, paying off your credit cards, taking advantage of tax benefits for parents and saving a little each month to create financial security.

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6 strategies for becoming debt free

6 strategies for becoming debt free

It isn’t the $5 cups of coffee. Or the $50 a month for the gym.

It isn’t that new smartphone, or your shoe addiction, or even that pricey cable subscription. These are common things everyone likes to waggle their finger at when they talk about overspending. But it isn’t necessarily any one of those expenses that really gets people into debt.

It’s usually all of them. And then some.

According to the 2018 U.S. Financial Health Pulse survey by the Center for Financial Services Innovation, 46.5% of Americans said their spending equaled or exceeded their income in the past 12 months. 33.9% said they were unable to pay all their bills on time. And 29.5% said they had more debt than they could manage.

That’s a lot of people who are worried about money.

Though frivolous or impulsive spending can be part of the problem, the slide sometimes starts with the best of intentions — with the desire to get a college education, perhaps, or to own one’s own home.

According to Northwestern Mutual’s 2018 Planning and Progress Study, mortgages and student loans, along with credit cards, are among the leading sources of debt in the U.S.

And when the nonprofit organization Student Debt Crisis surveyed student loan borrowers in 2018, 86% said student debt is a major source of stress. Add in credit card payments, car payments, utility bills, groceries and gas, and all the other things — big and small — that take our money every single day, and it’s clear how debt can become a deep, dark hole.

Which is why it’s so important to have a plan to get back out.

If you’ve wanted to become debt-free for a while, but didn’t know how to get there, think of your plan as a rescue rope you can hold onto during the climb. Everyone’s situation is different, but here are some popular strategies you might consider on your journey to becoming debt-free.

Related: Are you bad with money? How to know & what to do 

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If you have a significant amount of debt to pay off, you’ll likely be looking to cut costs in a meaningful way. A budget can help with that. First, when you’re going through bills, it can help to determine your priorities, this information can assist you in making informed decisions about what can go and what should stay.

Later, it can create a feedback loop, as you (and your partner, spouse, or other family members) compare real-world spending to the numbers in the budget and consider whether to take corrective action to stay on track.

And over time, it also may be possible to uncover the behaviors that have been holding you back.

If the idea of bird-dogging every penny has been a barrier to budgeting, or if you’ve tried and failed in the past, it may help to keep the process simple. The 50/30/20 rule is a simplified budgeting strategy that’s gained traction because it limits the number of spending categories a budgeter must establish and then follow.

After determining net take-home pay (what’s left after paying taxes), it breaks down the spending money that’s left into three buckets: needs, wants, and savings:

•   50% of the money goes toward needs, including housing costs, utilities, groceries, transportation, medical expenses and any regular debt payments that have to be made (credit card bills, loans, etc.). From there, it’s up to whoever is drawing up the budget to determine what are the true necessities and what belongs in the wants bucket.
•   30% goes to those wants. That’s everything from grabbing takeout, to your Netflix subscription, to getting your car washed and detailed for date night. Logically, this is the portion of the budget that has the most potential for trimming, but emotionally, it might require some real effort to get everything to fit the allocated funds.
•   20% goes to savings. This money might go into an emergency fund, some sort of savings account for short- and long-term goals and/or an investment savings/retirement account. If you decide to pay extra toward your credit card or student loan debt, that expense also would go in this category.

The percentages are meant as a guideline, and they can be tweaked to fit individual needs. The key is to make a budget that’s strict but doable.


Yes, this is easier said than done, but before rolling your eyes and moving on, consider the possibilities.

Is it time for a pay raise? If a bump is overdue, it might be time to have a talk with the boss.

Is there side-gig potential? Do you always have nights or weekends off, and would your employer be OK with your taking on a part-time or occasional job for extra money? Maybe a friend does catering, landscaping, house-painting, or some other work and could use an extra hand from time to time.

Could a hobby become a money-maker? Crafty folks can sell their wares online or at craft fairs and flea markets. History buffs can give lectures or teach classes. Animal lovers can offer dog-walking or cat-sitting services. Where there’s a passion, there’s often a way to earn income.


If that raise comes through, or you earn a bonus at work, or you get a tax refund from Uncle Sam, instead of living it up while the money lasts, consider using it to pay down some debt.

A few hundred dollars might not feel like it’s making much of a dent, but every dollar you pay over the minimum can help reduce the interest you owe on a credit card or student loan.

To get some idea of how paying even a little extra toward a bill can help, check out the alert on your monthly credit card statement. The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 requires card issuers to warn consumers about how long it will take to pay off a balance if only the minimum is paid each month.

Farknot_Architect / istockphoto

One way to consolidate debt is with an unsecured personal loan. You may be able to consolidate all or some of your debts at better terms, such as a lower or fixed interest rate and possibly pay them off in less time than you expected.

This strategy could be useful for those who aren’t up for keeping tabs on several bills every month. A personal loan can consolidate multiple debts together into one manageable payment, which could help make it easier to keep tabs on what you’ve paid and what you still owe.

And because the interest rates offered for personal loans can sometimes be lower than the rates on credit cards, you could end up paying less in interest over the life of the loan than you would have if you just kept plugging away at those individual revolving credit card balances.

Typically, the better your financial and credit history, the better the loan terms are likely to be, so it can be a good idea to check your credit record and make sure the information listed on credit reports is accurate.

Then look for a lender who offers the best terms to fit your needs. Keep the length of the loan in mind, as well as the interest rate and other terms to help you on the road of becoming debt-free.

It could be difficult (okay, next to impossible) to stop using credit cards completely since they’re commonly used for things like booking or holding flights, making online purchases and more. But making a commitment to reduce credit card utilization could help you cut spending and reduce the amount of money that’s only going toward interest on those cards.

A credit card is a convenient way to pay — if you can keep your balance at zero. But if you can’t afford to erase the balance each month with a full payment, the interest can start piling up.

And though many credit cards make limited-time “no interest” offers, it’s good to review the terms in detail.

For instance, some cards may have terms where if consumers don’t pay off the entire balance by the end of the promotional period, they may be charged all of the interest accrued since the date of purchase.

To better the chances of staying in check, some options may be to consider recording all credit card purchases with a budgeting app or pen and paper and to try and face the costs in real-time, instead of weeks later when the bill arrives.

Seeing progress is inspiring for many people. Think about how good you feel when you lose a little weight from dieting or gain some muscle from working out. Even small wins can be motivating.

How does that apply to downsize your debt?

Two of the commonly recommended approaches to debt repayment are the Debt Snowball and Debt Avalanche methods. These strategies vary but primarily focus on paying extra toward just one balance at a time instead of trying to put a little extra money toward all your balances at once.

The Debt Snowball

The Debt Snowball method directs any excess free cash you might have to the debt with the smallest outstanding balance. Here’s how it can work:

•   Start by listing outstanding debts based on what you owe, from the smallest balance to the largest. (Disregard interest rates.)
•   Make the minimum payment on all other debts and pay as much as possible each month toward eliminating the smallest balance on your Debt Snowball list.
•   After you pay off the smallest debt, turn your attention to the next-lowest balance.
•   Keep going until you are debt-free.

The Debt Avalanche

The Debt Avalanche method targets the highest interest rates rather than the balance that’s owed on each bill. It’s more about math than motivation — you can save money as you eliminate each of those high-interest loans and credit cards, which should allow you to pay off all your bills sooner. Here’s how it can work:

•   Disregard minimum payment amounts and balances, and list balances in order starting with the highest interest rate.
•   Make the minimum payment on all other debts and pay as much as you can each month to get rid of the bill with the highest interest rate.
•   Move through the list one debt at a time until you pay off all the balances on your list.

Though the methods are different, both plans provide focus, and as each balance disappears, momentum grows. But a newer approach, the Debt Fireball method, may be a better fit for modern-day debt, which could include a large amount of low-interest student loan debt.

The Debt Fireball

The Fireball method takes a hybrid approach to the traditional Snowball and Avalanche strategies. It’s called the Fireball because it can help blaze through bad debt faster by making it a priority. Here’s how it can work:

•   Categorize all debts as either “good” or “bad.” “Good” debt is generally things that can increase your net worth such as student loans or mortgages. (Interest rates under 7% could be considered good debt—rates above 7% would likely fall into the “bad” category.)
•   List all those “bad” debts from smallest to largest based on each bill’s outstanding balance.
•   Make the minimum monthly payment on all other debts and funnel any extra cash available each month toward the smallest balance on the Fireball’s “bad” debt list.
•   Once that balance is paid in full, move on to the next smallest balance on that list. Keep blazing until all “bad” debt is repaid.
•   Pay off “good” debt on the normal schedule while investing for the future. Apply everything you were paying toward “bad” debt to investing in a financial goal.

The Fireball makes sense mathematically because it gets rid of expensive (or bad) debt first, but it also provides plenty of motivation because momentum can grow as you approach the finish. These two combined elements could provide an extra boost to your efforts.

The deeper the hole you’re in, the longer it may take to climb out. But having the right plan in place before you start could give you a better shot at sticking to a budget, minimizing your dependence on credit cards and methodically reducing your debt in a way that keeps you motivated and saves you money.

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