Managing your finances as a single parent can be extremely daunting. As a single parent, you're likely to feel a lot of pressure to provide and it’s all too easy to lose track of money as you navigate your journey through parenthood. I’ve put together this list of 4 of the best budgeting tips for single parents to help anyone who has found themselves worrying about how to track their finances, save money, and create better budgets.
If you’re looking for budgeting tips for single parents, check out the 4 top tips below
1. Create a spreadsheet that details your regular incomings and outgoings
First things first, you need to know exactly how much money is coming into your account each month, and exactly how much goes out. In this spreadsheet focus on the fixed outgoings that you have to pay each month. Remember bills that might be paid annually too like car insurance or the water bill. Don't include optional spend like clothes shopping or take aways, but make sure you include a figure for food shopping, eating each month is pretty essential!
You can easily create a spreadsheet using free software on your computer or phone (try Google sheets on Android or Pages on iOS. Include columns for whether it's money you receive or have to spend and the date that it comes in or leaves your account if it's fixed. You want to include things like your wage and any benefits you may be entitled to, and your outgoings should list all the non-negotiable expenditures such as your bills and rent.
If payment amounts vary each month you can either use a figure for the average amount across the last 3 months, or the highest amount to date so that you can be sure you are setting aside enough.
By creating this spreadsheet, you’ll be able to see exactly where you money goes each month, when it leaves your account, and how much surplus cash you have once the essentials have been paid. This is also a great opportunity for you to reconsider what is deemed ‘non-negotiable’. Do you really need that monthly steaming service subscription, or could you cancel it and save some money?
Once you’ve figured out how much money you’ve got left over after paying your bills, you can then start on creating a budget.
If the amount you have to spend each month is more than you receive then it is time to look really hard at your bills and see what you can cut out to stop you spiralling into debt. It can be tempting to take high interest loans to help tide you over, but often that will leave you in a worst position so try contacting the National Debtline, a charity which provides free and impartial advice.
2. Keep a spend diary
When creating a budget, we’re going to want to focus our attention on the left over money that’s in your account after all your vital payments have gone out (if you have any). In order to do this, you’ll need to look at how you currently spend this money and decide if it would be better spent elsewhere. In order to make this decision, you’re going to want to keep a spending diary.
Every time you spend money, keep track of how much you spent, and whether or not it was essential by creating a spending diary. This doesn’t have to be fancy, you could simply use the Notes app on your phone. Some banking apps will help you with this as you can categorise payments and filter to see what you spent on each category each month.
You may not realise it, but it’s very easy to build up hundreds of pounds each month on things that aren’t necessary, such as buying lunches instead of creating packed lunches, or picking up a new top in the sale that you didn’t need. As you keep your spending diary, you may notice patterns of spending that are costing you more than you’d like. When you notice this and you understand how much that specific habit is costing you it helps motivate you to change the way you spend your money.
3. Make use of automatic saving accounts
Manually setting aside money each month for a raining day can be a challenge, but if it happens automatically then it's easier to build up a reserve in your savings accounts. There are apps like Plum and Chip which will do this automatically, but unless they offer you a particular bonus or good savings rate you might be better sticking with your own bank. You can set up a standing order with your bank to move money from one account to another.
Some modern banks allow you to do this in a smart way. With Monzo, for instance, you can have several saving pots as part of your main account and automatically transfer money to these. This keeps the money separate to your main account and allows you to have different funds eg for summer holiday, emergency bills and Christmas. It works best if you set the money to come out close to Pay Day.
4. Make small changes in your home and everyday life
Small changes can make a big impact, so it’s well worth taking this into account when going about your day-to-day life.
Actively working towards reducing your bills by making sure to turn off lights when you’re not in the room, taking shorter showers, and drying your clothes more cost efficiently instead of using a tumble dryer are all effective ways to reduce your monthly outgoings.
As a parent, you’ll undoubtedly find that you need new clothes and shoes for your children; instead of buying these brand new, check local selling sites for clothing bundles. Don’t forget that you can also make extra money by selling yours and your children’s old clothes too.
Managing your finances as a single parent can be a challenge
It can all feel overwhelming when the responsibility for budgeting, earning money and controlling spend are all up to you, but once you get in the routine of documenting what you spend and planning for each month you will feel more in control.
Remember to also take advantage of any income support, child benefit and discounts you may be entitled to (like the 25% single person council tax reduction) and don’t forget to work towards keeping an emergency fund.
