Managing money and creating a budget: Is there anything that screams “adulting” more? Financial responsibility takes knowledge, an honest look at your lifestyle, and, of course, discipline. Handling family finances, though—that’s tricky for a whole different set of reasons. There are more mouths to feed, activities to pay for, desires to fulfill or deny. And when you’re a single parent, the cash flow is often much drier. Keeping your head above water might feel like an impossible task, but stability with your family finances is attainable when you know what mistakes to avoid.
Do you know what some of the most common financial pitfalls are for single parents? In The Financial Guide for Single Parents Workbook, Larry Burkett warns single parents to look out for these financial traps.
While credit cards may seem like an easy way to fill in the gaps of a decreased income, avoid using them as much as possible.
2. Shopping When Depressed
Many people like to go shopping as a way to cheer themselves up. But the added debt you’ll incur from your shopping spree will only make you feel worse later. If you just need to get out of the house, leave your credit card at home if you’ll be tempted to buy. And if you think you might really be struggling with depression, read this.
3. Inadequate Child Support
Unfortunately, nearly 50 percent of child support is never paid. If you find that you’re not receiving payments, consult a professional on how best to handle the situation.
4. Giving in to the “Gimmies”
Don’t let your children’s wants cause you to exceed your budget. For many single parents, emotions like guilt cause them to overindulge their children, even if they can’t afford it. When you teach your kids how to separate wants from needs, you’re giving them an important life skill. Often, mindful spending comes from watching you and learning from your example, but iMOM’s Ask Why Before You Buy free printable is a great visual tool. Also, be sure to set designated amounts for holiday and birthday gifts and stay within the budget.
When you teach your kids how to separate wants from needs, you’re giving them an important life skill.
5. Trying to Maintain a Higher Standard of Living
Unfortunately, many parents will need to make lifestyle adjustments after a divorce or death of a spouse. You may need to consider moving, finding a roommate, or changing your spending habits.
6. Unexpected Expenses
Put aside a little bit of money from each paycheck to set up an emergency fund. Car repairs, broken refrigerators, and trips to the doctor always seem to happen when the checking account is drained. Without savings set aside, you may be tempted to get further into credit card debt.
7. Being Afraid or Embarrassed to Ask for Help
There are many non-profit organizations and churches with programs specifically designed for single parents. And many single parents find that family, friends, and neighbors are willing to pitch in when needed. But if you don’t seek help, they may never realize what your needs are.
8. Other Pitfalls
Changes in medical benefits, the vulnerability to “something for nothing” scams and loans, and even hidden debts such as loans also can be pitfalls. You may even have a few that weren’t on this list. Everyone has a particular set of traps that trip them up financially. The trick is to identify what they are and plan for them.
Taken with permission from Larry Burkett.
Let’s help each other out. What other pitfalls have you stumbled into?