Financial Planning for Single Parents

Single parenting brings unique budgeting challenges. According to the U.S. Department of Agriculture it costs an estimated $241,080 for a middle-income couple to raise a child to age 18 – and many single parents shoulder that responsibility alone. Even with adequate child support, it’s smart to be proactive about financial matters as a single mom or dad. Here are a few things to think about to get you started.

First, estate planning should be your top priority. It’s essential to make arrangements for your children should something happen to you. Draw up a will, designating a guardian for your children, and a “power of attorney,” giving someone the legal right to make decisions on your behalf.

Second, consider setting up a trust – a legal structure that is overseen by a trustee, in which your assets can be held for your children. Also, ask your employer about disability benefits. Generally, you will receive a smaller income when you claim disability; however, ensuring even partial income is crucial for single parents who don’t have another source of income to cover a gap.

Next, taking out a life insurance policy is equally important. The policy you purchase will depend on your finances. A term policy is the most economical because it offers a straightforward death benefit.
Health insurance is also essential. Premiums may be high, but if you’re uninsured, a serious medical procedure can be financially crippling. Comparison-shop for policies to find one that fits your needs.

Lastly, don’t forget about tax breaks! If you’re a single parent, file as head of household. You’ll pay less and claim a higher standard deduction – you can claim exemptions for yourself and each qualifying child. You also might qualify for the earned income tax credit, the child and dependent care credit, and the child tax credit. Always be sure to speak to a tax professional for the proper procedures.

Whatever your income, it’s important to give yourself a safety net. Put aside a bit of money from each paycheck to set up an emergency fund for car repairs, broken refrigerators and any other unexpected expenses that might come up. Every little bit helps, and we hope we’ve given you information to get your financial planning moving in the right direction.

 

The Recovering Spender – Lauren Greutman

 

 

 

 

 

 

 

 

In The Recovering Spender, Lauren Greutman draws on her own life experience to teach invaluable lessons about living within your means.

To outsiders, Lauren and her husband, Mark, appeared as though they were living a charmed life. As she says, “On the surface, we had it all. Custom home, luxury cars, beautiful babies, and all the bells and whistles…” But disaster lurked beneath the surface.

Though the Greutmans seemed like they had more than enough for all their necessities and many luxuries, they were living way beyond their means simply to keep up with the neighbors. Too soon, they found themselves with a mortgage that had not been paid in months, their car seized and sky-high debt that reached $40,000.

Their dream had become an awful nightmare.

Through a long journey of recreating their relationship with money and spending, the Greutmans arrived at where they are today: back in the black and fully committed to spending less while living within their budget.

In The Recovering Spender, Greutman details the steps she and her family took to pull it off. She shares her hard-earned tips and practical advice to help others who find themselves ending each month with a deficit that keeps growing.

Lauren also shares many of her personal struggles in ways relatable to readers to help them learn from her mistakes. It’s easier for an over-stressed mom who never feels like she can stretch the dollar far enough to take tips from another mom who’s been there, than it is to heed advice from a financial expert who’s never experienced anxiety about being able to pay for groceries.

The book also takes readers through the process of going from being in the red to living completely debt-free, offering a step-by-step guide with actions readers can take immediately as they work their way through the book.

Some of the actionable chapters in the book include:

  1. Take an Inventory of Your Spending.
  2. Declutter Your Finances.
  3. Do an Expense Audit.
  4. Curb Your Spending and Define Your Values.

Most importantly, The Recovered Spender is a guide for getting off the path of debt, and living happily within your means.

Can you relate to Lauren’s experience? Have you successfully changed your spending habits? We want to hear from you. Share your story in the comments!