Single Parent’s Guide to Money

Are you stuck in a rut or finding your money situation is causing you more stress than good? Then it’s time to get back in control of it all! This is the ultimate single parents guide to money.

As you are most likely aware I am a single parent and currently saving as much money as I can for a house deposit. I realise that my budget and savings goal might be a bit extreme for some, but I wanted to share with you all of the things I am doing to be able to better my financial position, in order to help you!

I have been there. I have lived hand to mouth for many years. It has taught me a lot about value, what’s important and how to live a fulfilling life. It doesn’t all happen overnight, but each step you take is in the right direction towards financial freedom and reaching your goals.

Let’s get stuck in – Single parents guide!

1. Set a financial goal! A big mantra of mine is to have goals. I highly recommend looking at your overall finances and setting yourself a financial goal to aim towards. This could be clearing debt, being able to stick to a budget, saving money for a holiday, etc. If you have a goal, this will help you keep accountable and motivated. You need a reason to keep to your budget!
2. Know your money! You need to work out what is coming in each month and what is going out. Have a column for each. It may be helpful to have them in date order as to when they come in and out. It is also helpful to know when your financial month starts and end. I start my financial month from the 25th of each month rather than the first. This is my pay check date. It makes it much easier if you start from the date where your biggest income comes in, be it wages, universal credit, etc.
3. Shop around for your bills. Now that you know what is coming in and out – see if there are wages to reduce some of those set outgoings. For example, you can shop around for gas and electric. Make sure you are on the cheapest tariff for your usage. Avoid pay as you go systems as they are much more expensive than pay monthly using meters.
4. Create a sinking fund! This is absolutely crucial. This sinking fund needs to be a yearly total of how much you are likely to spend on birthdays, Christmas, school uniforms, MOT, etc. Find the total that you would spend in a year and divide it by 12. Put that money aside each month and use that money when these things come up. Alternatively, if you can afford to, put the whole yearly amount aside into a savings account ready for these things when they come up.
5. Budget for birthdays and Christmas. In order to be able to create your sinking fund total, you need to have a clear budget for birthdays and Christmas each year. I know the amount can differ greatly, but generally younger kids don’t need as much money spent on them as older kids. When they are younger, the toys don’t cost as much and they don’t need as many things. Save your money when they are younger if you can. For example, £100 for a birthday (including a cake, mini party and presents). You don’t even need to do a big party every year – it could be alternate years to reduce costs). With Christmas, have a strict budget and buy in advance (often it can be easier and cheaper to buy in the sales throughout the year rather than trying to do it in the busy months leading up to Christmas. Again, this could be £100 per child as an example. It is so important that once you have decided a budget, that you then stick to this. As the children get older, it might be helpful to share this figure with your child so that they develop a financial understanding (obviously after they are aware of you buying rather than Santa). It can also help the child to be able to choose what they would like a little more, knowing that they have a budget to stick to when making suggestions for what they want.
6. Know your entitlement! Check that you are getting everything you are entitled to. Check out https://www.entitledto.co.uk entitled to website (from the government – If UK) and make sure you are getting what you should be. You could be missing out. Childcare costs can also be reimbursed. If you are still unsure on this then visit citizens advice for financial advice with this.
7. Avoid phone contracts/latest devices! It can be so tempting to try and keep up with the Jones’, but you really don’t need to. If your phone is good enough, then sign up to a sim only contract or rolling sim only contract. This will reduce your costs dramatically. If you do need to upgrade your phone, I would recommend buying secondhand upfront and then keeping to a sim only deal. It is so much cheaper in the long run. The same goes for devices. Sell any that aren’t being used and buy secondhand if you can or if you absolutely need to buy a device.
8. Clear debt! Clearing debt can have a tremendous impact on your financial and mental wellbeing. Start by clearing off the highest interest debts first. Clearing your debt, evening if it is only a small amount each month, will allow you to have the money to be able to spend on the things you want. No pain no gain here. If you want to clear your debts, you may have to make some sacrifices for the short term, but the longer term impact will be worth it!!
9. Open a help to save account! The government is currently running a help to save account for anyone currently entitled to benefits. Once it is opened, it doesn’t;t matter if you no longer become entitled to benefits, you can still keep it. The government lets you put in £50 a month for up to 2 or 4 years and you will earn a 50% bonus of the amount saved. The best way to maximise the bonus is to not withdraw any money from it. You will get your first payout after 2 years and the second after 4 years and then the account will close. So potentially in 2 years you will have a maximum of £1200 saved and will earn a £600 bonus. After the total of 4 years you would have saved a maximum of £2400 and received a bonus of £1200. This is incredible! You can close the account after the 2 years, but make sure you do it after the date shown on your online account. This is certainly a longer term goal, but it will allow you to earn, essentially, free money.
10. Meal plan! I go on about this a lot! Meal planning is key to sticking to budget. It’s one of the easiest ways that people lose track of their money. You need to plan (roughly) what 7 meals you will have for the week and what will be lunches/packed lunches. You don’t have to have the meals on set days, but if you know roughly what you will be eating it will help you to buy only the things you need. Check through your cupboards first and see if you already have things to make the meals, anything you don’t have add to the shopping list. Be clear on how many snacks you are allowing and what breakfast options you will offer. Then add on your staples, like milk, tea, coffee, formula, etc. Only buy the things when you need them. Use up all of the shampoo/tinned beans you have first before buying more. Do you have lots in your freezer that can be used to make meals? Get creative, but avoid takeaways if you can. You can organise the meals to make life a little easier. For example, Monday’s are always a struggle and can be hard going – this is when we have pizza or a quick oven meal. It’s like a cheat day, but on a day that suits you. Maybe you have clubs for the kids on a Wednesday or a heavy day of meetings, etc, that is the day when you have a quick throw together meal – but make sure that is in the plan.

I hope this will help you gain financial; and mental wellbeing moving forward! I would love to know how you get on in the comments below.

Rachel, That 30 Something Life X

For more info check out my youtube channel… https://www.youtube.com/channel/UCJqyV_emo6brPbNPTaIHmeA