What would you guess is the minimum income a single parent needs to get by in the U.S.? Using 2020 data from MIT’s Living Wage Calculator, it’s possible to tally up this amount for each state. The results are sobering.
In Mississippi, the lowest-cost state in the analysis, the living wage for a single parent with one child was $43,971 before taxes. A single parent with three children must earn $60,112 before taxes to get by in the state. For reference, the median household income in Mississippi – which incorporates single-person households as well as multiperson households occupied by dependent children – is about $43,600.
What about high-cost states, like California and New York? In the Golden State, a single parent with one child must earn $65,000 before taxes just to get by. A single parent with three kids must gross more than $100,000 to stay out of poverty. Things are even worse in New York, where the living wage for a single parent with three dependent children is a whopping $112,507.
But most single parents don’t earn anywhere near $112,000 per year, even in relatively high-wage states like New York. According to Pew Research, about 27% of solo parents – single parents not cohabiting with a partner – live below the poverty line. About 30% of solo mothers, who account for upward of 80% of all solo parents, live under the poverty line, compared with 17% of solo fathers.
There’s no way around it. When merely making it to the next payday is a challenge, laying the groundwork for financial stability – let alone prosperity – seems like a remote prospect.
Even if someone is fortunate enough not to live near the poverty line, time and budget demands hinder many single parents’ best efforts to build up their finances. Amicably divorced or separated single parents may be able to rely on an ex for occasional financial or emotional support, but it’s important not to overstate the extent of even that support. According to the U.S. Census Bureau, the average child support payment in 2013 was $5,181 for mothers and $6,526 for fathers. That amounts to 16% of income for the average single mother and 9% of income for the average single father.
How to Build Up Your Finances as a Single Parent
Building financial resilience as a single parent is possible. No matter how daunting or unfamiliar it seems at first, you can do it.
You don’t need to do the following things in order. But you should put estate planning and applying for life insurance at the top of your to-do list.
1. Complete the Estate Planning Process
You don’t want some distant relative – or, worse, a judge – deciding who will care for your children when you’re gone. Even if you’re young and healthy, you owe it to yourself and your dependents to ensure your wishes – most importantly, around child care and the distribution of your worldly assets – will be faithfully executed after your death.
When both parents are alive and competent, the question of guardianship is straightforward: The surviving parent typically gets custody. Things are trickier when the other parent is deceased or unfit for custody. They’re trickier still when the surviving single parent has few close relatives or doesn’t want to grant custody to the relatives they have.
If you’re fortunate enough to have significant financial assets, ask your probate attorney about setting up a revocable trust to hold your assets in safekeeping until your children come of age to make financial decisions for themselves. These days, many attorneys recommend age 25 or 30. Simply naming your children as beneficiaries on your accounts isn’t always sufficient if you die before they reach age 18. And creating a trust has the added advantage of routing your assets around probate, saving time and money.
Get an estate planning checklist with plenty of detail on costs and considerations. Then contact a probate attorney to get the ball rolling. If you can’t afford to pay an attorney out of pocket, look into pro bono estate planning services offered through your state bar association.
Pro tip: Estate planning can be done online in less than 10 minutes with Trust & Will. They can help you set up trusts, wills, and guardianships.
2. Purchase Term Life Insurance
Many people question whether they need life insurance. But most working-age people with dependents do, and single parents definitely do. Luckily, applying for coverage has never been easier. With a company like Ladder, you can apply in less than five minutes and receive an instant decision.
A level term life insurance policy, which promises a level payout during a predetermined term, is almost always more cost-effective than a permanent (whole or universal) life insurance policy. A permanent policy remains active indefinitely and diverts a portion of premiums paid to a cash-value balance that grows over time. But it also carries a higher premium than a term life policy with the same face value.
A term life insurance policy’s payout replaces future income the beneficiary loses access to if the policyholder dies. Your life insurance needs are a function of three major factors: your age, your household income, and the number of dependents relying on your income. Younger, higher-earning parents with multiple children need more life insurance than older parents with more modest incomes and fewer or financially independent dependents.
Carrying adequate life insurance is doubly important for single parents who can’t rely on a partner’s income to make up the difference after they’re gone.
For relatively young, healthy parents who don’t smoke or have preexisting health conditions, life insurance is surprisingly affordable – a few dozen dollars per month per $1 million in coverage. Your premiums will vary based on your age, health profile, and benefit amount. But it will probably be less than your monthly car payment.
3. Look Into Disability Insurance
Disability insurance is another crucial component of your family’s safety net. It’s designed to cover income loss due to a serious illness or injury lasting weeks, months, or longer.
Disability insurance comes in two forms: short- and long-term. Policy terms vary by issuers and products. But short-term payouts are generally limited to 26 consecutive weeks of disability. Long-term payouts last far longer – at least two years and often up to or beyond age 65 in cases of permanent disability.
Disability insurance isn’t cheap. The monthly premium often exceeds monthly premiums for term life insurance. And while term life premiums remain fixed for the full term, disability premiums often increase each year. However, disability insurance is a critical safeguard against life-changing events that can render you unable to work for long periods and permanently alter your family’s financial trajectory. You can control disability insurance costs by maxing out any employer-sponsored coverage, which is likely to be cheaper than coverage you purchase independently.
Just make sure you know what you’re buying. Payouts don’t always replace your entire paycheck, especially if you have irregular income like many self-employed people do. And be sure to use PolicyGenius, a first-rate quote aggregator, to find the best rates.
4. Get Health Insurance Coverage
The federal government no longer imposes tax penalties on those who fail to carry adequate health insurance coverage. But the risk of a significant out-of-pocket health expense is too great to chance. You must protect your children from the financial fallout if you become injured or suffer a serious chronic illness.
If you’re eligible for health insurance through your employer, evaluate your options and choose the plan that best fits your needs. Many companies have HR representatives you can consult. Plans with lower monthly premiums typically carry higher deductibles and coinsurance payments. That means higher out-of-pocket costs for policyholders who utilize services not fully covered by the policy. But it’s a reasonable trade-off for cost-conscious single parents in decent health. Parents with more significant health care needs often benefit from costlier policies with lower out-of-pocket costs.
If you don’t have access to health insurance through an employer, check state or federal health insurance exchanges for options available in your area. Many single parents qualify for premium-reduction subsidies. Healthcare.gov has a rundown of state-specific income limits and other restrictions. Some parents – including pregnant women, those on Supplemental Security Income, and those classified as low-income – and their eligible children even qualify for Medicaid. Even if you don’t qualify for subsidies or Medicaid coverage, your kids may qualify for health coverage under your state’s Children’s Health Insurance Program (CHIP).
Pro tip: If you choose a high-deductible health insurance plan, you can also use a health savings account (HSA). Lively offers individuals free HSA plans.
5. Determine Your Eligibility for Government Assistance Programs
Your income, identity, or household status may qualify your family for additional government assistance programs such as the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).
Like Medicaid and CHIP, WIC is a collection of state-administered programs, so check with your state’s health and human services department or the equivalent for eligibility requirements. For single parents, WIC’s most tangible benefit is its voucher program, which offsets purchases of nutritious foods like milk, eggs, whole grains, fruits, vegetables, and baby formula.
Lower-income single parents may also qualify for the Supplemental Nutrition Assistance Program (SNAP), which helps families purchase healthy groceries; for subsidized housing and government rental assistance programs, which help very low-income families afford safe, comfortable housing; and for state and local housing assistance or placement programs.
6. Run a Cash Flow Analysis & Create a Budget
Set your financial baseline with a household cash flow analysis that reveals your monthly net cash inflow or outflow. Use this information to create a comprehensive household budget – or, if you’re not keen on formal budgets, to get a better grip on your monthly surplus or deficit.
To create a 90-day cash flow average – the most accurate reflection of your current cash flow – average your income and expenses from all active cash accounts over the preceding three months.
If all you care about is determining whether you’re accumulating or losing wealth, you only need to know your month-ending balance change. In other words, are your cumulative account balances at the end of each month greater or less than your cumulative account balances at the end of the prior month?
Creating a formal household budget is more work. You have to sort your transactions by category to drill down on potential overspending. Many banks do this automatically. If yours doesn’t, you’ll have to categorize transactions manually. For better visualization than old-school spreadsheets, use a free budgeting app like Mint or a more feature-rich suite like Tiller. While many single parents swear by cash-based budgeting methods like envelope budgeting, the ideal vehicle for your day-to-day finances is a free checking account or low-fee reloadable prepaid debit card coupled with one of these budgeting apps.
The point of all this is to achieve a positive cash flow. The sections below include some general tips to get there. If you’re already spending less than they earn, they’ll help you use the surplus to build wealth and financial resilience.
7. Reduce or Eliminate Superfluous Expenses
The results of your cash flow analysis will determine whether you need to cut nonessential expenses and to what extent. Even parents who don’t regularly splurge on extraneous things can probably identify unnecessary expenditures they won’t miss.
Think about what you value in life and what you have time for. Do you need to pay $30 or $40 per month for the multichannel portion of your cable-and-Internet package? Or are you willing to switch to a streaming service like Amazon Prime Video and spend $10 or $15 per month? Can you bring your lunch to work four days out of five rather than eating out? How would your pet react to switching to a cheaper, nutritionally equivalent food brand?
Whatever expenses you decide to slash, cut the things you won’t miss first. After your budget is under control, rerun your cash flow projections using your new spending baseline. You can add back discretionary spending as your finances allow.
Pro tips: Services like Truebill will help you find and cancel unwanted subscriptions. They can also help you negotiate some of your bills, like cellphone, cable, and more.
8. Make a Plan to Pay Off High-Interest Debt
For many single parents, high-interest unsecured debt – most often credit card balances – is a major financial drag. Even if you’re current on your payments and aren’t yet experiencing any negative effects of bad credit, zeroing out your high-interest balances improves your financial position. Right now, your carried balances are hampering your ability to save for the future and eroding your savings value.
For strictly personal obligations, use sustainable strategies to pay off debt. There’s no right or wrong method here. It’s all about what works for you. To reduce cumulative interest charges, aim to pay off high-interest debts as quickly as possible after accounting for basic necessities like housing, food, and heat. If you’re fortunate enough to have good credit or ample equity in your home, look into a low- or no-interest way – like a 0% APR credit card promotion, a low-interest home equity line of credit, or a low-cost unsecured personal loan from a prime lender like SoFi – to pay down high-interest balances.
Debts held jointly with an ex-partner or ex-spouse require special consideration. In most states, joint debts include any obligations in both your and your ex’s names. In community property states – Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin – you may also be liable for your ex-spouse’s sole debt. If your divorce isn’t final, you may be subject to a different set of considerations. When in doubt, consult a family law attorney licensed to practice in your state.
Regardless of your specific circumstances, resolving joint debts is easier said than done. Ideally, you’d work with your ex to separate your balances and transfer each share into individual accounts, one in each of your names. If your ex refuses, you have to get a court order, which takes time and adds to your legal bills. To prevent your ex from running up additional debts, consult your attorney about how to cancel your joint accounts and what to do with the balances.
9. Avoid Predatory Financial Services Providers
Avoid the temptation to use predatory financial services providers, especially payday lenders. They charge exorbitant interest on short-term loans and lead to vicious cycles of debt. If an unexpected expense pops up, opt for a payroll advance app like Earnin. Earnin runs entirely on voluntary contributions from users rather than mandatory fees or interest, so you’re not obligated to pay a dime to use it.
10. Find a Financial Accountability Partner
With your financial baseline in place, it’s time to identify a financial accountability partner. Look for someone you trust to make sure you’re spending and saving wisely now while remaining on track to reach your long-term financial goals. This is similar to the buddy system approach to financial fitness.
Your accountability partner doesn’t have to be a credentialed finance expert. But choose someone knowledgeable and responsible enough to offer actionable advice. Look for someone organized and responsive you can meet or communicate with regularly about finances. Accountability works best when reinforced weekly or even daily. It’s ideal if your partner has comparable financial goals and expenses and are at roughly the same career stage as you, especially if they’re also a single parent.
As long as their relationship with money is comparable and you’re on good terms, your ex-partner is an excellent choice. If you’re sharing custody, you’ll doubtless see this person often anyway.
Otherwise, think about asking a close friend, sibling, or business partner. Their identity is less important than your confidence in their ability to check your work and provide honest feedback.
11. Lean On Your Extended Support Network
Don’t rely solely on your financial accountability partner. A robust external support network is crucial for any single parent juggling professional, personal, and financial obligations.
Your core support network typically includes parents, siblings, extended relatives, friends, professional mentors, teachers, and sometimes even coworkers. Consider what you can ask them to do to make your life easier without asking too much or pushing boundaries – for instance, babysitting, running the odd errand, or dropping off a hot meal if you’re sick and can’t cook.
The support you receive from your extended network won’t be entirely or even principally financial. But it lessens demands on your time and attention, putting you in a better position to remain on top of your finances.
12. Buy Secondhand (or Free!) Where Possible & Appropriate
This is another excellent way to reduce your discretionary expenses without too much belt-tightening. Just because something is used doesn’t mean it’s worn out or useless. And there are lots of ways for people to make sure their old stuff gets into the hands of someone who needs it – and maybe make a little cash doing it.
That means you can get the stuff you need for a lower price, often for pennies on the dollar if not entirely free. Here’s how:
- Make the most of thrift store finds for clothing and accessories.
- Buy home goods and furniture from surplus stores, wholesalers, auctions, or private sellers on platforms like Craigslist and Nextdoor. Regularly check these platforms’ “free stuff” sections too.
- Buy a used car rather than paying a premium for a brand-new vehicle.
- Browse Facebook groups or solicit your friends for gently used baby and toddler clothing, which parents are often happy to part with.
- Check resale apps like LetGo, which connects buyers and sellers of gently used goods.
13. Build a Robust Emergency Fund
Once you’ve trimmed your discretionary spending and gotten your high-interest debts under control, you’re ready to begin building an emergency fund. Without an income-earning partner to support you, your emergency fund could be your only buffer during a temporary period of unexpected hardship.
The ideal emergency fund is sufficient to replace at least three months’ living expenses. But most experts recommend six or nine months. And many go further still – up to and beyond 12 months. At minimum, your emergency fund should be robust enough to bridge the gap between your last day of work and the start of your disability insurance policy’s payout. If you have long-term disability only, that gap may last six months or longer.
You won’t build your emergency fund overnight. To start, open a high-yield savings account with a reputable bank; I’m partial to CIT Bank, myself. Deposit any savings not allocated for long-term goals, such as your kids’ education or your retirement. Then, determine a manageable monthly amount to set aside – say, 5% or 10% of your take-home pay. Automate a transfer from your checking to your savings account to ensure it happens each month.
If you’re unable to make consistent contributions to your emergency fund and long-term savings accounts, prioritize the emergency fund until it reaches the minimum balance you need. If the worst happens, you want to have a cushion to fall back on.
14. Understand the Income Tax Incentives Available to You
Single parents are more likely to qualify for certain income tax incentives, credits, and deductions.
For starters, unmarried single parents can generally file as head of household, rather than single. Head of household filers qualify for a higher standard deduction – $18,000 versus $12,000 for single filers. They also benefit from a modified bracket scheme that sometimes results in a slightly lower overall tax rate for lower- and middle-income filers.
Other income tax incentives for single parents include:
- Dependent Exemptions. Before tax year 2018, a custodial parent could claim a dependent exemption for each child or adult dependent in their care, shielding a portion of their income from taxation. This tax code provision has been suspended through the 2025 tax year, but it’s never too early to plan.
- Child Tax Credit. You may be eligible for a tax credit – a dollar-for-dollar reduction in your tax liability – of up to $2,000 for each qualifying child you claim on your tax return. However, the child tax credit phases out at higher incomes. If you earned more than $200,000 in the most recent tax year, you might not qualify.
- Child and Dependent Care Credit. If you’re filing as single or head of household, you may be eligible for the Child and Dependent Care Credit, which provides a dollar-for-dollar reduction of qualifying child care expenses you’ve paid. Eligible child dependents must be under age 13 when the care is provided, but individuals over age 13 also qualify if they’re deemed incapable of self-care. There’s a cap of $3,000 in qualifying expenses for one eligible individual and $6,000 in qualifying expenses for two or more eligible individuals.
- Earned Income Tax Credit. Lower-income single parents between the ages of 25 and 65 may qualify for the Earned Income Tax Credit (EITC). Income limits for EITC eligibility increase in proportion to the number of claimed dependents.
To assess your eligibility for – and the suitability of -these tax maneuvers, consult a tax professional or get IRS guidance. You may also be eligible for state-specific dependent credits, deductions, and incentives if you pay state income taxes.
15. Take Advantage of Family-Friendly Employer Benefits
In addition to employer-provided health insurance, sign up for any family-friendly benefits your employer offers. The dependent care flexible spending account (FSA) is an increasingly common and valuable benefit for single parents paying for dependent care.
A dependent care FSA works similarly to a health care FSA, but there are some differences, per SHRM. You must spend funds held in a dependent care FSA on qualifying care for children under age 13 or older dependents incapable of self-care. Examples of qualifying care include day care, summer camps, and preschool not sponsored by the account holder’s employer. To be eligible, dependents must live with the account holder for more than half the year.
Single and head of household filers can generally contribute up to $5,000 in pretax dollars to a dependent care FSA. But if you’re separated and have no immediate plans to finalize the divorce, the limit is lower. The IRS contribution limit is $2,500 for married parents filing separately. But check with your employer to find out if they or the plan they offer has a lower contribution limit than the IRS allowance.
Other family-friendly benefits some employers offer include:
- Flexible Scheduling. Policies vary by employer. But true flexible scheduling allows employees to set their own work hours provided they make deadlines, attend mandatory meetings, and meet all other expectations.
- Work-From-Home Allowances. These are lifesavers for single parents without full-time dependent care. Many employers offer limited work-at-home allowances, typically one or two days per week. A growing number of employers allow employees to work at home three, four, or even five days per week. If it’s not offered as part of a standard benefits package, negotiate for it during or after the hiring process.
- Paid Parental Leave. Paid leave is a crucial safety net for expectant single parents. The federal Family and Medical Leave Act requires many employers to grant up to 12 weeks of unpaid leave for qualifying medical and life events, including the birth or adoption of a child. But there’s no federal mandate for paid maternity or paternity leave. Fortunately, many employers voluntarily offer such benefits. However, a full 12 weeks of paid parental leave is comparatively rare. Two to six weeks is more common. After your medical leave and parental leave, the only way to get paid while you’re out is to dip into accrued paid time off or file for short-term disability.
16. Establish Tax-Advantaged Accounts to Fund Long-Term Goals
The two most significant long-term expenses virtually every parent faces are their kids’ education and their own retirement.
As a single parent, you’re solely responsible for funding these goals. It doesn’t matter if you expect a life-changing inheritance or hope to find a fiscally responsible partner. Things don’t always go as planned. You can’t rely on anyone to bail you out.
529 College Savings Plans
Your kids will probably enroll in higher education before you’re ready to retire. So start there.
Open a state-sponsored 529 college savings plan as soon as you can. You can do this in five minutes or less using CollegeBacker, a super-simple savings portal.
These plans’ contribution limits vary by state, but they’re very high. The stingiest states cap lifetime contributions per beneficiary at $235,000, higher than the total average cost of a private four-year college degree. You’re allowed to open a 529 plan sponsored by any state. But your home state probably offers state income tax benefits for resident account holders.
Your 529 plan contributions aren’t tax-deductible. However, they grow tax-free and don’t incur a federal tax liability upon withdrawal as long as you use them for eligible education expenses. From 2018 on, eligible expenses include expenses for qualifying post-secondary education – including associate degrees and trade school programs – and certain private K-12 expenses. Nonqualifying distributions incur a 10% penalty on top of regular federal income tax.
Tax-Advantaged Retirement Accounts
The universe of tax-advantaged retirement accounts is much more expansive than the realm of college savings plans, but it’s not as hard to understand as it seems.
For starters, most single parents filing as single or head of household are eligible to contribute to two types of individual retirement accounts (IRAs): a traditional IRA and a Roth IRA. Both are available through myriad full-service online stock brokers. I’m partial to TD Ameritrade.
Traditional IRA contributions are tax-deductible, subject to income and annual contribution limits. Distributions made later in life are generally taxed at the account holder’s current tax rate.
Roth contributions are not tax-deductible. But contributions grow tax-free, and distributions made later in life are not subject to income tax.
Roth IRAs do have a significant drawback for parents who are separated but not yet divorced and are filing separately. IRS rules prohibit them from making any Roth contributions in tax years when their adjusted gross income (AGI) exceeds $10,000 and they lived with their spouses for any amount of time. By contrast, those with AGIs under $137,000 who lived apart from their spouses for the entire tax year may contribute to Roth IRAs, subject to a phaseout between $124,000 and $139,000 AGI.
IRA contribution limits generally increase every year or every other year. For 2020, the limit is $6,000 for both account types. Account holders over age 50 are eligible to make an additional $1,000 in catch-up contributions per year to increase the likelihood they’ll have an adequate amount set aside when they retire.
Higher-income workers eligible for workplace retirement plans are subject to contribution phaseouts. In 2020, the phaseout occurs between $65,000 and $75,000. Taxpayers in this range see smaller deductions than those earning less than $65,000. Taxpayers earning over $75,000 per year don’t qualify for the deduction at all. But they can still make nondeductible traditional IRA contributions up to the annual contribution limit.
The other tax-advantaged retirement account type worth mentioning is the qualified plan. Qualified plans are employer-sponsored retirement plans that allow pretax contributions up to plan-specific limits imposed by the IRS. For a 401(k), the most common qualified plan type, the pretax contribution limit is $19,500 in 2020. Employees aged 50 and over can make up to $6,500 in annual catch-up contributions.
Many employers offer matching contributions up to a particular employee contribution threshold. For example, an employer matches the first 3% of gross pay contributed by the employee, or $3,000 on a $100,000 salary, for a total contribution of $6,000 after the match. If your employer does offer a match, do your best to exploit it fully, even if that means making some temporary sacrifices.
If your employer doesn’t offer matching qualified plan contributions, don’t sweat it. Using your most recent cash flow analysis, determine how much you can reasonably put toward retirement after accounting for emergency fund contributions and recurring expenses. Then set a more aspirational goal to target as your income grows. For instance, 2.5% of gross pay might be all you can afford now. But increasing your contribution by 1.5% each year will get you to your aspirational goal of 10% by year six.
17. Set & Track Shorter-Term Savings Goals
Think beyond your emergency fund and tax-advantaged investment accounts. Almost everyone has nonurgent, shorter-term savings needs. School supplies, vehicle repairs and maintenance, a down payment on a house – the sky’s the limit.
Use an automatic savings app like Acorns or set up automatic transfers through your bank to divert small contributions to purpose-based accounts each month or pay period. Maintaining separate accounts for separate purposes ensures you won’t do something like commingle your school supplies fund with your down payment fund.
18. Make a Long-Term Plan to Increase Your Earning Power
Single parents work harder and longer than partnered parents. For many, the prospect of going back to school or even studying for a licensure exam is daunting and may even seem impossible.
But it’s never too late to invest in yourself. I’ve seen single parents perform truly heroic feats of self-betterment. Soon after finalizing a messy divorce, a longtime friend’s mother earned her graduate degree. She’s now an associate professor and consults on the side. While I don’t know her exact age, I’m willing to bet she was no younger than 50 when she went back to school.
These days, investing in yourself doesn’t mean dropping everything. Full-time workers have access to an abundance of flexible or accelerated degree programs. And employers are increasingly eager to subsidize tuition for loyal employees.
19. Check in Regularly on Your Finances & Credit
Keep close tabs on your family’s financial situation, including your personal credit. Ask your financial accountability partner to remind you to do this.
By law, you’re entitled to receive one full, free credit report per year from each of the three major consumer credit reporting bureaus. Stagger these reports throughout the year – perhaps one in April, another in August, and a third in December.
For more frequent insights, sign up for a free credit monitoring service like Credit Karma, which offers monthly credit score snapshots. Think twice about paying for credit monitoring, though a more robust service is appropriate if you’ve been a victim of identity theft in the past.
20. Manage Your Family’s Expectations
Finally, work to manage your kids’ expectations – and your own.
Above all else, don’t compare yourself to dual-income households in your neighborhood, social circle, or kids’ peer group. Fiscally, they’re nothing like yours, however snugly their interests overlap with your own.
Encourage your kids to pursue less expensive hobbies and extracurricular activities without stifling their curiosity or foreclosing areas of apparent promise. Any club sport that requires extensive travel is costly. Sports like hockey or golf require expensive, specialized equipment that must be replaced repeatedly throughout a secondary school career. Less specialized sports like soccer or basketball are lighter on the wallet.
Take fewer vacations, and take them closer to home. Drive to the nearest tourist beach or mountain range for the weekend rather than fly across the country for a week at a dude ranch. That said, driving isn’t always cheaper. Always crunch the numbers on flying versus driving before you leave, and account for lost work time too.
And don’t forget to teach kids age-appropriate personal finance lessons. Beyond building robust emergency savings and growing your education and retirement buckets, your most important financial goal as a single parent is to ensure your kids are financially literate and empowered to make educated financial decisions when the time comes. Years from now, you don’t want to have to provide direct cash support to your competent, able-bodied, college-educated 30-year-old.
Parenting is hard enough. Single parents can’t rely on a partner’s income, time, or emotional support. Even those who receive financial or custodial support from ex-partners or have close-knit extended family networks to rely on must contend with a range of financial and practical issues that dual-income households typically divide equitably.
Address most or all the items on this list during your kids’ early years, and you’re more likely to find yourself in a position of financial strength over time. You’ll also be better prepared to overcome unexpected setbacks like job loss or a health crisis. But let’s not pretend the road to financial independence is easy. In my book, anyone who’s able to stay on that road at all deserves the utmost respect.
Single parents, what are you doing to make ends meet and increase your family’s financial security?