Saving as a single parent
5/19/2016, 1 p.m.
(METRO CREATIVE) Saving money can be hard for any parent, but especially so for parents who are raising their children in single-parent households. Single parents face hurdles that parents in dual-parent households may not encounter, and many of those hurdles involve finances.
Worrying about savings can have a negative effect on single parents. In the 2014 "LoveFamilyMoney" survey commissioned by the financial services provider Allianz, 76 percent of single parents said preparing for both retirement and their child's college expenses causes them a great deal/some stress. That is in spite of 41 percent of single-parent families reporting that they had excellent or above average knowledge of financial planning.
Those figures highlight the struggle even the most financially savvy single parents face when trying to save money, much less the dilemma faced by single parents who are not as knowledgeable about money management. Finding room for savings can be tough for single parents already working with limited budgets, but single parents who want to start saving more may find that some simple strategies can help them grow their savings and build more solid foundations for their futures and their children's futures.
· Find ways to scale back. Just because you might have grown accustomed to something does not mean you cannot live without it. Scaling back on luxury expenditures like cable or satellite television and smartphone data plans can save you a substantial amount of money each month. Cut the cord with costly cable or satellite plans in favor of more affordable streaming services. If that's too great a sacrifice, downsize your television package to something more basic and much less expensive. Rather than purchasing an unlimited data plan from your mobile phone provider, choose a less costly plan that limits your data access. You may discover that adjusting to less data makes you less reliant on your smartphone, which might end up being a blessing in disguise.
· Set up automatic contributions. Setting up automatic contributions to a savings account is a great way to guarantee you make monthly deposits. Direct a portion of your paycheck into a savings account rather than direct depositing it entirely into your checking account. You may be surprised at how quickly you adjust to having less money in your checking account.
· Enroll in an employer-sponsored retirement program. If you are not already contributing to an employer-sponsored retirement account, then enroll in one if your employer has made that option available. Such contributions are typically pre-tax (you will pay tax on the money down the road when you begin to withdraw it), meaning they won't affect your take-home pay too significantly. In addition, enrolling in such a program can help relieve any stress you may have about financing your retirement.
· Make your own meals. Single parents juggling a career with their dual roles as mom and dad may be too exhausted to take on dinner duties at the end of each weekday. But making your own meals rather than going out or ordering in can save substantial amounts of money that can then be directed to college or retirement savings accounts. If necessary, use a slow cooker to prepare meals in the morning so everything is ready when you arrive home at night. Or map out meals for the week on weekends and prepare as many as possible on Saturday or Sunday so all you need to do is reheat them when arriving home at night.
Single parents struggling to save money may find that the simplest solutions are also the most effective.