Single parents face special pressures in managing finances
As a single parent for 10 years, Megan Bosh, Grand Forks, was always on the lookout for ways to cut expenses and try to stick to a budget.
It wasn’t easy. She was 18 when her daughter, Eva, was born. But the experience taught her to face financial problems head-on.
“It’s really hard to manage your money and hold onto the rent (money) ‘til the next paycheck,” she said.
“Don’t be afraid to ask for help in certain ways, it doesn’t hurt to try.”
With her landlord, she negotiated to pay half her rent twice a month, rather than in full each month, she said.
She also reached out to creditors, she said. “Food comes before bills, so call if you can’t make a full payment, most companies will work with you.”
She used coupons and asked for discounts on things like automotive services.
“I’d say, ‘I can get my oil changed over there for $19,’” she said. “I don’t think I ever paid $20 for an oil change.”
When you’re single and raising one or more children, finances can be difficult to manage, said Richard Bechhold, financial counselor with The Village Family Service Center, Grand Forks.
“You have rent, groceries and gas prices rising,” he said.
Add to that, the feeling that you don’t want to deny your children things they want, he said, and you have the ingredients for financial stress.
“As a single parent, you don’t have an additional income coming in,” Bechhold said. “You may be collecting child support (or) the other (parent) may not be working, is unemployed or chooses not to pay.”
Married couples have more options, he said. “If you need extra money, your partner could get a part-time job without adding a day care expense.”
A single person who works outside the home may incur the expense of day care.
“It may not be worth it,” he said.
Student loan debt
Bosh’s “biggest struggle” was paying off student loans and finding a reliable car with limited funds, she said.
She would buy a vehicle with her tax refund, she said. “I went through a lot of used cars.”
Then, there were the unexpected bills.
“Even if you try to stick to a budget, things come up you can’t really control,” she said. “Medical bills are hard to take care of. Insurance doesn’t pay for everything.”
Preparing your child for a new school year — buying clothes, shoes and supplies — “can get really expensive, (even) hundreds of dollars,” she said.
Single parents should “reuse anything you can, and use everything you have,” she said. “Learn to sew a sock, a hem or the blown-out elbow or armpit of a nice shirt.”
Bosh bought food in bulk and split the cost with single-parent friends, she said. They’d make meals together and divide the food.
Don’t overlook coins either, she said. “Pennies add up, so don’t throw them away. Keep a jar for extra change — you will need that too, for laundry.”
Don’t buy pets, she emphasized, “no matter how cute they are or how lonely you are. They can be so expensive,” especially if a health problem arises.
Even if finances are tight, single parents should try to put some money away each month, if possible, Bechhold said.
In cases where both spouses are working, if one person gets laid off, you still have the other income, he said. A single parent doesn’t have that luxury.
After the essential bills have been paid, “pay yourself first,” by saving at least $25 each month or 10 percent of your take-home pay.
Traditional advice has been to have six months of living expenses socked away, he said. “These days, that’s harder to do, but even (the equivalent of) three months of income or expenses” is a good idea.
For example, if you have $1,200 in living expenses, such as rent, food, gas and entertainment, you should aim for $3,600 in savings, he said.
Putting away some of your tax refund is also recommended.
“With savings, you have some (funds) set aside in case something was to happen. You’d have (money) to live on while you recuperate or have found another position.”
“So much now is tied into credit,” Bechhold said. “Insurance companies and prospective employers check to see how well you’ve paid your bills.”
Single parents “should use credit lightly,” he said. “Pay off credit cards monthly or, if you can’t, make more than the minimum payment.”
If you can’t pay off a bill, aim to pay at least half, and the remainder the next month, he said.
When she was single, Bosh didn’t use credit cards, she said. “It was the best financial decision I ever made.
“If I would have had credit cards, “I know I would have maxed them out. I’d have made (the smallest) payment.”
As a single parent, “you get distracted; missing a payment is easy sometimes.”
When your children ask for things you can’t afford, be honest with them, but give them age-appropriate responses, Bechhold said.
“If your child wants something, you may say, ‘Right now, we can’t afford it, but maybe we will next month or next paycheck.’”
“It’s hard for us to deny our children. Sometimes, we buy them things because we feel guilty,” he said. “You want to provide for them, and you want them to have better than what you have.”
Advertising is constantly stimulating kids’ desire for material things, he said. “We see that all the time. (Marketing messages) say, ‘You have to have this outfit to make everybody like you.’”
Parents are pressured, he said, but a compromise — something less expensive — may be a better choice.
“Children learn money behaviors before 3 years (of age),” Bechhold said. By age 12, “it’s ingrained how they may handle their money when they’re older.”
Since Bosh married in September 2012, financial pressures have eased, but she still uses coupons and buys sale-priced or used items, she said. These days, “it’s nice to buy myself and my daughter things once in a while.”
Before marriage, she remembered, “I wonder how I did it. There were times when I couldn’t pay the bills; they just got out of control. It was overwhelming.
“You’re just driven by the sheer will to survive.”
If you need help getting your finances under control, go to www.helpwithmoney.org, a web site managed by The Village Family Service Center of Grand Forks. The Center also offers on-line financial counseling; for more information, (701) 746-4584.
Tips for stretching single-parents’ dollars
The everyday cost of living can strain a single parent’s budget, not to mention those unexpected bills that crop up, according to Richard Bechhold, financial counselor at The Village Family Service Center, Grand Forks.
Here are some steps that Bechhold recommends to help you get and keep your finances under control:
- Determine exactly what your monthly income is. If you’re in dire financial straits, it’s most important to get a handle on what money you have coming in. “We always tell people to look at the net income — money earned after deductions — that’s what you have to pay bills with,” Bechhold said.
- Get a clear picture of what you’re spending. Find out where you’re spending your money, he said. “A lot of times, people have no idea where it’s going.” For at least a month, keep track of your expenses by category (such as rent, groceries, gas, child care, entertainment, clothing, etc.). It’s helpful to carry a small tablet, in your pocket, in which you record every purchase, he said.
- Itemize expenses. Lump these purchases according to category, Bechhold said. “For me, ‘eating out’ includes ordering in, fast food, morning coffee at Starbucks and sit-down restaurants.” People very often underestimate what they spend in each category per month, he said. Once they’ve captured these amounts, they can make decisions about where to cut back.
- Barter with a friend for child-care services. To cut down or eliminate day care costs, ask a friend to exchange babysitting services with you, Bechhold said. “You could offer to babysit for a friend while she’s working, if she agrees to care for your child while you’re at work,” he said. “Or, check with a family member (who) might agree to do it for nothing.” Your church may offer a kind of support system to help alleviate some stress.
- Limit your credit cards. Don’t have more than two credit cards, Bechhold said. More than that and you’ll find it’s harder to keep track of what you owe.
- Put at least three months’ worth of expenses into a savings account. Save at least $25 per month, or 10 percent of your take-home pay, in an “emergency fund,” a cushion to live on while you find another job or recuperate from illness or accident, Bechhold said. If possible, have six months’ living expenses set aside.
- Find free or reduced-cost events to enjoy with your children. The greater Grand Forks community offers “a lot” of activities for families, especially in summer, he said. Attend matinees instead evening movies which cost more.
- Seek help from social service agencies and advice from a financial counselor. Social service agencies can determine if you qualify for food assistance and may refer you to The Village Family Service Center for financial counseling.