Being a single mother or father is never easy. You will need to juggle various schedules, your work, as well as the wants and needs of your children. Most importantly, you will have to figure out how to pay your bills and save for your children’s future in the process. If you are living on a fixed or limited income, figuring out how to budget and save money can be especially difficult. So, in today’s post, we are going to look at a few of the best ways to save money as a single parent!
Try to Live a More Frugal Lifestyle
When you only have one income and have multiple mouths to feed, you need to find every way to cut down on expenses. You may need to downsize your housing (within reason), find deals at the grocery store, or cut down on non-essential expenses. This doesn’t mean that you can’t have any fun though. For example, if you like to shoot at the gun range, you can still find affordable options at Outdoor Solutions.
Pay Down Debt First
It may seem like paying down debt just takes away from your available cash, but the cost of interest on credit cards and loans ultimately costs you way more over the long term. Let’s say that you have a credit card with a 16% APR. This means that any leftover balance will accrue 16% compounding interest every year. However, if you put the funds in a high-yield savings account, you can expect to see growth of just under 2% per year.
Choose Low-Risk Investment Vehicles
While high-yield savings accounts may not sound like a way to grow your wealth quickly, they are very low risk. You might feel tempted to opt for an investment account, which can yield far greater gains. However, you should put the majority of your extra cash in low-risk vehicles, like savings accounts, ETFs, or mutual funds. This way, you can greatly reduce the risk of losing money if the markets drop. This does not mean that you can’t or shouldn’t invest. However, it is good to take an 80/20 approach. 80% of your available cash should go into low-risk vehicles, while 20% can go toward higher-risk options like stocks.
Put Extra Cash In An Emergency Fund
Even if you live paycheck-to-paycheck, there is almost always a little bit left over at the end of the week or month. Any cash or change that you have left after you’ve paid for the essentials should be put into a separate emergency savings account. Rather than being used for long-term savings, this account will help set funds aside for when an emergency arises. After all, you never know when your car will break down or you will need to pay for a medical bill.