Households headed by a single parent are becoming more frequent in the United States, with younger generations, typically Millennials (born 1982-1996) and Generation Z (born 1997-2012), finding traditional nuclear family structures obsolete.
Nowadays, many young parents opt to adopt or raise a child by themselves. The research found that nearly a quarter of American children under the age of 18 lived with one parent and no other adults in 2019. The U.S. has the highest share of children living with only one parent compared to other developed nations.
Other statistics showed that in 2023, around 15.09 million children lived with their mothers, while about 3.05 million were being raised in a household headed by a single father.
All of this research points to the increasing awareness of more households in the U.S., either having a single parent or children sharing households among their parents. Although many often claim that divorce, separation, death, or having a child outside of a relationship are the biggest reasons for children being raised by a single parent, new studies have actually shown that younger parents are finding marriage and traditions as absolute.
Roughly 46 percent of Millennials and 44 percent of GenXers (born 1965-1980) now say that marriage is becoming obsolete, looking to create a more blended family dynamic where children can be raised in single or dual-income households.
Typical single household earnings
Although many younger parents are looking to raise a child independently, without a partner, the financial implications of raising a child have become increasingly problematic, especially in the United States.
New data suggests that around 32 percent of single moms earn $40,000 and more, while only 10 percent of single mothers bring home more than $80,000 per year.
Other research by the Pew Research Center has found that single mothers or solo mothers have the highest poverty rate per household, with 30 percent living in poverty and only 17 percent of solo fathers.
Around 16 percent of cohabiting couples are said to live in poverty, while the minority, 8 percent of married couple households, earn below the poverty threshold.
Most recent analysis showed that the U.S. poverty threshold for a family of four is $29,960, while with an individual that can be as little as $14,891 per annum.
With the cost of living sharply rising over recent years due to record-high inflation, single parents have had the most challenging time adjusting to higher costs of essentials, including groceries, utilities, and housing. That excludes having enough money to cover other expenses such as child care, school fees, and transportation and having enough left to put away in an emergency fund.
How to budget more effectively as a single parent in modern America
As if being a single parent wasn’t already an expense, or hard enough, juggling both career and family responsibilities, rising costs, and economic uncertainty have only made a deeper dent in single-family households’ expenses in recent years.
Having a budget is now more crucial than ever before, and for single parents, planning for their child’s future to help secure their future is becoming increasingly challenging for many.
However, despite eye-watering costs, there are ways you can budget as a single parent and still have a bit of cash left each month to put towards an emergency fund, social security, or savings.
Know where your money is going
One of the best ways to start budgeting as a single parent is by knowing where your money goes each month. While you may have already been making some cutbacks, and trying to live as frugal as possible, without clear indication or proof of where all your money is being spent, you’ll have difficulty keeping track of your expenses.
Gather as many bills, bank statements, and payslips as you have. By conducting an analysis of your income and keeping a score of your expenses, you’ll begin to have a better picture of everything you’ve received and all the money that has been spent.
Consider how much you are making compared to how much you’ve spent. You’ll also need to look at things such as any debt(s) you may owe, and how much you are putting aside into your savings each month.
By visualizing your finances, you will begin to see where you may have been spending more money on things that you will need to cut back on, while other things, such as debt or savings can receive a bit of attention.
Create a realistic roadmap
Once you’ve gathered all of the information, consider planning a possible roadmap that can help you better understand how you can begin to puzzle everything together in a way that makes sense to you.
The four main budget categories to consider include:
- Income
- Expenses
- Debt
- Savings
For each paycheck you’ve received, consider how much money you’ve brought home and where those checks have been spent. By looking at your expenses, you’ll better understand what are the things that may be eating deeper into your pockets each month.
On top of this, you can consider any debt which you may be carrying. Clearing any debt is one of the best and perhaps easiest ways to reduce any unnecessary expenses, and divert more cash towards other things.
However, it’s essential to remain realistic about these things, as you don’t want to burden yourself or make too many lifestyle changes that could lead you or your children to live an even more uncomfortable lifestyle.
Pay off small and high-interest debt
As a rule of thumb, one of the best ways to reduce your debt burden is to pay off any small accounts or high-interest-bearing debt as quickly as possible.
Dusty McMullin, Vice President of Operations at Sibu Sea Berry Therapy, a specialty supplement and functional foods company, says, “One of the best rules our father taught my brother, Peter, and I about debt is to pay any small debt off first.”
Dusty and Peter McMullin are second-generation entrepreneurs now managing partners at their father, Bruce McMullin’s business, which he founded in 2004.
Any small debt, whether $100 or $1,000, can become a heavy burden on your household’s finances each month. Creating a debt repayment plan will ensure that you can steadily begin to lighten the burden, making small monthly contributions or covering the accounts in full by paying a lump sum amount.
However, before doing this, ensure you have enough cash in reserve to help carry you through the month or cover other expenses. Although it’s essential to pay off all debts you may have, doing so at the expense of your family can deter your financial well-being.
Budget for debt and savings after expenses
On the topic of paying off debt, another easy way to begin balancing your household’s books is by following a simple equation that many people use to budget for their monthly expenses, including debt and savings.
Following the 50/30/20 rule allows you to allocate enough of your income towards your household expenses (50%) and necessities, including debt (30%), and the remaining 20% is reserved for savings.
Take your income, subtract your expenses, and you’re in the green if you have any cash left. Any remaining cash will then need to be divided into things such as your necessities, which can be purchased, such as services and goods, and also debt.
Any remaining cash you have left can be deposited into a high-yield savings account separate from your existing checking account to ensure you don’t unnecessarily or knowingly spend that cash.
Open a high-yield savings account
“Saving for a rainy day, especially as you’re starting, is one of the best financial decisions any person can make,” says Dusty. He further says, “Having something to fall back on is crucial. And while it’s perhaps harder these days to save, seeing as high costs continue to eat into consumers’ disposable income, every little bit of money put towards a savings account can amount to something bigger in the long-term.”
A separate high-yield savings account would mean you can deposit any remaining cash into this account and leave it to grow. Using this account as a safety net, you can motivate yourself to save towards something that will provide you with a substantial return when you need it the most.
Be more practical with your spending habits
While some things are more important than others, being more practical with your money would allow you to stretch every dollar and penny you have in your account.
Things such as buying in bulk or doing your monthly grocery shopping at a wholesale food outlet would allow you to save more and instead stock up on necessary items that can last longer. Comparison shopping is also another way to ensure you get the best possible price for any item you may need.
You can further purchase in-store brands instead of more specialized products or items. Buy things that will last longer in your fridge or freezer that won’t spoil too quickly, or plan your meals each week, indicating how much you can spend on groceries and other items.
You can also make additional cutbacks around your home, such as canceling any expensive subscriptions, choosing more budget-friendly options for things such as streaming services, or splitting the costs with a friend or family member.
For more significant purchases such as household items, search for better deals online or even on second-hand marketplaces. You can always shop for furniture at the local thrift store or a nearby hospice store.
Get into the habit of controlling what you can
As a single parent, you already have a lot on your plate that you need to deal with in your day-to-day life, and having additional financial stress is perhaps the last thing you want to consider when going to bed at night.
Dusty says, “At our business, the wheels can fall off at any moment, and while we always need to plan for these moments, however, during these times, we encourage our team members to focus on those obstacles they can control, before having to tackle additional problems.”
This can often be applied in our own lives as well. By focusing on those financial pain points we can control right now, such as having too much debt, or running out of cash each month because our expenses outweigh the money we make, we can actively do something to make slight improvements.
Remember that everything takes time. While you may be making slight cutbacks here and there, you’ll eventually reap the rewards thereof in the near future.
Talk to your children about money
This may be a subject that is often heavily debated among parents and caretakers, however, it’s important to talk to children about money, especially from an impressionable age.
As a parent, you can decide for yourself what is the best way to approach the scenario, but taking the time to teach your children the value of money or how to work with an income and expenses can help them better understand how money works once they start making their own.
According to experts at the Child Mind Institute — talking to children about money, whether this may be teaching them how to set up a budget, or even showing them how your household expenses work, will teach them financial responsibility.
More than this, some suggest that teaching children about money from a very young age will help them make better financial decisions, allow them to know when to set limits, and reduce the urge to impulse buy.
Whatever your parenting style or technique, consider finding a workable solution that allows you to share financial knowledge with your children. Try to make it fun for them to understand better, or look for ways to incorporate smart spending when you’re out doing a monthly grocery haul.
Try to share expenses
Where possible, find a workable solution that allows you to share your household expenses with your partner, a friend, or a family member. While the topic of money can always feel like a sensitive subject for someone, addressing the elephant in the room will help clear the air, especially if there is more than one parent in the mix.
Try to find a way where both you and your partner can split certain costs, such as child care or other expenses related to the kids. If you’re a single parent with no other dependents, consult with a family member or friend and see whether they would be open to moving in together, allowing you to split rent and utility bills.
Approaching a family member could be another option. Where possible, see if they can help you out by renting a bedroom or two in their house or maybe even allowing you to split other expenses, such as subscription costs or internet bills.
While it’s not always easy to talk about money with others, informing others that you need help will perhaps encourage them to know that you are relying on them, at least until you can find your feet again.
Wrapping Up
Being a single parent is perhaps one of the most challenging jobs in today’s economic climate, and things are only more challenging for those who have to endure these struggles themselves.
As the main breadwinner of your household, you must ensure that you have complete control over every dollar you earn and spend each. As a parent, you want to ensure you can provide for your children and help them secure a prosperous future.
Approach your financial situation with an open mind, and make the necessary cutbacks if needed. Rely on your instincts to make hard decisions and focus on what you can control right now.
While these can all be challenging moments in your life as a parent, taking a small step forward each day begins to make a big difference in the long-term financial well-being of your family.
Featured Image Credit: Photo by Kindel Media; Pexels
The post 9 Ways To Build a Secure Financial Future as a Single Parent in Modern Times appeared first on Due.
This story originally appeared on Entrepreneur
