The 3 Most Important Money-Saving Tips For Single Parents

Single Mom Money
by Single Mom Money

Welcome to Single Mom Money, guys. This is your place for building wealth, dodging debt, and learning practical everyday money tips for a single parent. It’s March 21st, also known as National Single Parents Day. So, to celebrate all my single moms out there, I’m sharing three money savings tips.

These are impactful, yet simple, money tips that single moms can put in place to shore up their financial picture, especially in times of extreme flux. Let’s get right into it.

1. Build up an emergency fund

If you don’t already have an emergency fund, I think it’s pretty apparent and obvious right now that you are going to need one. I’m going to help you get that in place.

Emergency funds often come up in personal finance. They are really just a savings account that is only used for specific items. I only use money in my emergency fund for job loss, a medical emergency, a major care repair (not just maintenance), or a major health crisis. Emergency funds are not a “nice-to-have”; you must absolutely have an emergency fund.

Some of the best ways to save emergency funds is to earn cash back on things you’re already buying or, if you are paid bi-weekly or weekly, you should have a month, like April, where you’ll have an “extra” check. Put that entire check into savings, strictly for emergencies.

My bare minimum recommendation for emergency funds is at least five hundred dollars per person in your household. That’s the minimum, for those with pretty low incomes who can’t find other ways to generate additional income or pull back on expenses.

Before you start doing things like aggressively paying off debt, saving for a Cancun trip, or trying to pay for school out of pocket, prioritize your emergency fund. That’s because those major expenses — home repairs, car repairs, job loss, medical costs – are the things that get people off track financially.

Saving money

2. Pay yourself first

Saving is a priority and should be the first line item in your budget. If you aren’t saving first, you have this budget thing all backward.

I had to make that mindset shift for myself. Before I started doing Single Mom Money, when I got paid, I would pay off all my bills, or as many as I could at one time, because I was really anxious about not being able to pay bills.

This isn’t a strategy I use now, but I used to pay off everything, buy groceries, go out to brunch with friends, buy socks for my son, and a shirt for me, or whatever. All these things weren’t critical. Then, at the end of the month, I’d be like, “Oh man! I have no money to save.”

This simple money tip reminds you not to fall into that rabbit hole where you spend all your money and have nothing for savings. Pay yourself first and make sure you are protecting yourself with savings.

Taking out life insurance

3. Protect your legacy

This is a hard subject, but we need to talk about what happens if we’re not here anymore. As our children’s only parent, we have to think about safety nets to protect our children.

The last thing I want my seven-year-old son to worry about, if I’m not here, is whether he will have food, clothing, and shelter. I have family that could take him in, luckily. A lot of people don’t have that.

Still, I need to make sure my family would have the resources to bury me, pay off the debts I leave behind, and take care of my son since my parents are retired and on fixed incomes.

We don’t want to leave our families and children with these weights and burdens. The last thing they want to do, when grieving, is think about the next meal or how to pay for college. At the very least, think about a term life insurance policy for 20 years.

A lot of employers will offer insurance. You should get it, because why not; it’s usually really cheap, if not free. But, as we’ve seen with this Covid 19 crisis, things can flip like that. What if I had insurance through my job, but don’t have that job at the end of the month?

Now, I have no insurance. There are too many variables. My suggestion is to have at least a basic term life insurance policy.

Drafting a will

I also suggest you have a will to give your loved ones some sort of guidance on how to manage your estate. Your estate is the assets that you leave behind and your debt. How much money you leave for your children will depend on age.

Your will provides guidance; a grieving family won’t be in the mindset of a financial adviser, and the last thing you want is for them to be taken advantage of or mismanage the money.

Leave some clear directions for people while you're in a position to do so. There’s an app called Tomorrow, which is a free app you can use to create a will. LegalZoom also offers some basic will information for a pretty cheap price, if you can’t afford to hire an attorney.

Another thing I highly recommend in terms of protecting your legacy is to create a document that you share with anyone who might be stepping in as a guardian for your children. This is basically a “how-to” sheet for your children.

I included my son’s favorite food, what school he goes to, his teacher and friends’ names and contact information, his favorite color and lullaby, and what books I read to him. All these things will give your child a sense of normalcy and comfort in a time of discomfort. This is a free thing you can do for your child.

Money-saving tips for single parents

So these are my tips: have an emergency fund, pay yourself first, and protect your legacy. Happy single parents' day. What are your favorite simple money tips? Drop a comment and let us know.

Join the conversation