Financial Tips for Single Moms

While a majority of women find freedom and solace in single motherhood, total independence also comes with its own challenges. One big obstacle that can navigate into your life is financial planning. Every person desires financial freedom, but in order to achieve these worthy goals, you need to plan your finances carefully. Your financial plan will depend on your level of income, stage of life, level of expendable income, debt load, short-term, and long-term goals. If you are working towards restoring your financial status, your primary focus should be debt reduction. Here are a few tips with which single moms can keep their finances under control.

Assessing your financial status

First of all, categorize your income into three groups: wants, needs, and desires. In this way, you will be able to prioritize things in your life more clearly. Expenses such as utilities, student loans, and rent are needs, and should be given top priority. Wants may include wallpaper change in the kitchen, buying an Xbox for the kids and Godiva chocolates which can wait until your finances come back in order. Desires include a luxury cruise you have been hoping to take for several years, a brand new sports car, or an exclusive game-room for the children.

Clearing debts

Interest rates for debts are high, and they grow much faster than your savings. Therefore, as soon as you divorce or separate, the first thing you should try to do is to get rid of the debts. Try to pay more than the minimum on every card. Pay highest amounts on credit cards with the highest interest rate. Try avoiding late fees, as surcharges can be very significant in ruining your financial plan.

Save for emergency

An emergency can significantly devastate a single mom

financially. You may meet an accident in the family, or you may just lose your job suddenly. You should have at least 6-9 months of expenses in your savings account.

Set long-term goals