Single mothers experience elevated levels of financial instability.
In the period from 2021 to 2022, with the reduction of pandemic-era assistance, the poverty rate for families led by single women surged from 12% to almost 27%, as reported by the National Women’s Law Center. The U.S. Department of Agriculture found that over 33% of households led by single mothers faced food insecurity in 2022.
Cathy Curtis, founder and CEO of Curtis Financial Planning in Oakland, California, remarked, “Raising kids on a single income can be extremely challenging.”
Here are three financial tips for single mothers provided by expert
1. Automate budgeting and savings:
For single mothers managing young children and facing substantial childcare expenses, it’s beneficial to acknowledge that “the years go by fast, and those expenses will taper off over time,” as suggested by Curtis, a member of the CNBC FA Council.
Create a comprehensive list of all fixed expenses, encompassing mortgage or rent payments, insurance, debt commitments, and utilities. To streamline your financial responsibilities and save time, Curtis recommends establishing automatic payments for these fixed expenses. This will alleviate one monthly task, she notes.
Once fixed expenses are accounted for, Curtis advises closely monitoring and budgeting for variable and miscellaneous expenses.
“Exerting control over these expenses is crucial in preventing overspending,” she emphasized.
Single mothers should also prioritize planning for their own future, according to Jennifer Bush, a certified financial planner at Mainstreet Financial Planning in San Jose, California.
“It would be beneficial if they allocated a portion of each paycheck to themselves,” suggested Bush. This ideally involves setting aside funds for both a rainy-day fund and retirement savings.
Even if the amount saved is modest, experts emphasize not to be discouraged. Research indicates that even a small increment in the retirement savings rate can have a substantial impact.
For instance, a 35-year-old individual earning $60,000 per year could potentially generate an additional $110,000 by retirement by increasing their retirement saving contribution by just 1%, which is less than $12 a week. This calculation assumes a 7% annual return, as demonstrated in an example provided by Fidelity Investments.
2. Be proactive in your professional endeavors.
Frequently, single mothers grapple with feelings of guilt or anxiety regarding their employment, noted Emma Johnson, a financial journalist and the creator of the well-known blog WealthySingleMommy.com.
According to Johnson, “Children often thrive when their parents work outside the home. Girls, in particular, achieve more academically and professionally.”
Continue to actively pursue significant career opportunities or promotions, even if it entails spending slightly less time at home, Johnson advises. Additionally, don’t dismiss the possibility of returning to school if obtaining a degree or additional training could lead to improved career prospects.
A layoff, undoubtedly, would have a particularly severe impact on a single-parent household. To address concerns and ready themselves for such a situation, Curtis suggests that single mothers take additional precautions.
To bolster job security, she recommends “continuously updating skills and cultivating a robust professional network.”
It’s also prudent, according to Curtis, to explore alternative income-generating ideas in case of a period of unemployment, such as freelancing or part-time work. Even if content in your current job, it can be beneficial to explore these alternative income sources in advance.
3. Develop the ability to rely on support from others.
“If you’re a single parent, don’t hesitate to seek assistance,” advised Johnson. Consider reaching out to family members, friends, other parents, or neighbors for help with tasks like picking up or dropping off your children, babysitting, cooking, and more, she suggested.
Curtis added that single mothers can find solace and assistance by connecting with groups specifically designed for women facing similar situations. She also recommended exploring various financial blogs, including Johnson’s, NYC Single Mom, the Single Mom Blog, and Beanstalkmums.com.au. In the podcast realm, Curtis highlighted Single Moms on the Money and Like a Mother.
For those facing significant challenges, Johnson emphasized the importance of checking eligibility for any available federal, state, or local benefits.
