How to Manage Your Finances When Single Parenting

Take bite-sized steps, focus on education and pass on the knowledge.

Written by Elaine King CFP® / August 2, 2022

Quick Bites

  • Take small steps that can be measured in order to reach your goals.
  • Don't skimp on education; it's the key to a better future.
  • Break the pattern: Do better than your predecessors.

Did you know that out of 11 million single parent families with children in the U.S., almost 80% are headed by single mothers? The average single parent spends over 40% of their income in childcare. They have limited access to education and tend struggle with their finances.[1]

It is clearly no walk in the park for anyone in today’s economy to find a stable, flexible and steady job, let alone raise children without the help of the other parent. My advice is to focus your future in small and measurable transitions, focus on education that will lead to a higher income and involve your children in the family’s financial plan. How?

Inside this article

  1. Establish small and measurable transitions
  2. Focus on education

Establish small and measurable transitions

Most of the clients that I serve seek guidance when their path seems endless, and I get it. When it feels like you are inside a long tunnel it is very challenging to see the end. For this, I recommend mini transitions.

For example, when I create a financial plan I always build a timeline. In addition to my client’s age (to see how many years until retirement we need to plan for), I also add their children’s age. They are happy to see in the timeline when they go to college, but then not so much when we start planning financially for it.

However, it can be a true relief and help guarantee there is a college savings plan that's ready by the time they are heading off to freshman year.

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The other small transition you need to think about is the size of the house you need and when to downsize to reduce expenses after college. For example with a single parent client I have, it also helps us map out when she will get her college degree and how her income will increase giving her an opportunity to contribute to her Roth IRA. Mapping out life-changing events in small measurable transitions with dates and numbers makes it easier to digest and cope when the path seems long.

Focus on education

The census study shows that a large percentage of single parents have not been able to complete their college degree and spend most of the time at their jobs and catering to their children leaving very little time for career development.

This is why it is necessary to realize that the years to raise your child is only a small percentage of time compared to your life expectancy. You must take this into consideration when planning your future and making big financial decisions.

For example, I have a client who is a single mother with three elementary school-aged children. I encouraged her to go back to college and set a clear schedule for doing homework while she focused on finishing her degree after hours and during the weekends. That education will pay off with a higher future salary.

Break the pattern

I come from a family of immigrants: Asian, European and Native South American. My grandfather used to say that we need to improve the condition of our parents. I wish I was wiser when I heard it as a teenager, since it has taken a big chunk of my life to figure it out.

Breaking the pattern and improving conditions generation to generation is hard. But by evolving, you are ensuring your children will have better tools to thrive without you, in their own life. Enroll them in financial literacy camps or courses, and encourage them to get a job so they can also learn the value of time and money.

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At any age, I recommend giving a small allowance, budget or chore to teach them to earn their own way. Remember to always promote positive energy around the art of creating growth financially with your actions.

And, although it may seem that you will have double the work, you may also have double the love. The key to having a successful single parenting life is to focus clearly on your financial plan and sticking to it, while always taking care of yourself first.

Article Sources
  1. "Single Mother Statistics." Single Mother Guide. Mar. 12, 2022.

About the Author

Elaine King

Elaine King CFP®

Elaine has served as the Family’s Financial Planner for over 1,200 families and 100 multigenerational family enterprises crafting actionable family financial plans.

Full bio

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