How To Budget For A Child’s Better Lifestyle As A Single Mother?

Starting your journey as a single parent is not easy. Managing children and figuring out the best employment opportunity is challenging. Becoming a single mother is ideal for planning things for the new life. You could save the brainwork and initiate the plan after the official separation.

Budgeting is critical to your new lifestyle. Aligning your goals along with your child’s nurturing goals is essential. Things could become further stressful if you never had a job or chose to parent.

However, there is nothing to regret. You could start from the very moment. Having an employment opportunity provides a cushion to finances and stabilizes savings. It is all about gearing up the courage and taking the lead to dominate the finances.

Single parents, especially mothers, face sincere financial issues.

Top Financial issues faced by Single mothers

As per Gingerbread statistics, “There are around 1.8 million single parents in the UK.” And 90% of these are women.” Back then and now, motherhood has never been a cakewalk. Here are some financial obstacles they suffer and deal with post-separation:

• Unless the woman receives alimony payments, raising a child single-handedly is difficult.
• Managing essential and discretionary expenses like Christmas gifts, birthdays, movies
• Managing household errands along with child expenses
• Prioritizing savings for children and leaving with no money to invest or save for retirement
• Around 48% of single parents face economic abuse by dealing with debts and arrears
• 66% of single parents have to cut on food for themselves to feed the child

The statistics are nerve-shaking. Amid this, budgeting becomes almost impossible.

For example, in case of limited financial access and needing money to pay for a child’s health, loans for single mothers can help. It is precisely for single mothers to get the sum for any purpose. If you are unemployed and need help, you could reveal the basic benefit receipt or investments to get the loan. One can get this on bad credit.

Now, let’s move to the budgeting aspect. It might be challenging to meet both ends in an extreme crisis, but these tips will surely help.

5 Easy Budgeting Tips for Single mothers

Single moms share lower incomes and are less financially secure. The condition worsened post-pandemic. If you do not share any contacts, do not worry. You can always manage and budget sagaciously. Here are some budgeting tips for single mothers:

1)     Improvise your financials

To create any plan, you must have a clear tab over what you hold. Analyze the assets, investments, and cash in hand. Identify the liabilities and monthly discretionary expenses that you cannot avoid. Plan and categorize each expense as per priority.

Priority expenses do not include movie tickets or dining. Instead- the school fees for your kid, stationery, medicines, electricity bills, food, etc. Set strict budgeting goals as per outgoings. If you could miss discretionary expenses for a month, you could save for rent and dedicate the remaining part to savings.

2)      Analyze the government benefits eligibility

The government of the UK provides benefits to single mothers or fathers. It could help boost the budget significantly. In the country, you may be eligible for the following benefits:

• Universal Credit
• Healthy Start Vouchers
• NHS Low Income Scheme
• Council Tax reductions
• Widowed parents’ allowance
• Jobseekers Allowance
• Childcare cost tax credit
• Bereavement support payment

If you identify your eligibility for any of these benefits, apply without delay. It could help you manage expenses well until you fetch a suitable job opportunity.

3)      Invest in an Emergency Fund

An accident could consume all the savings you made until now, leaving you with nothing to look at. To avoid situations like these, set up an emergency fund. Analyze the existing financials and the monthly amount you could dedicate to them.

One must ensure at least 6 months of emergency fund savings. It could help you save for your child’s needs and fall back on the sum in a dire financial crisis.

It is ideal not to tap it until you have no other option. You could earn an interest rate annually on your emergency funds savings.

As of July 2020, the fund holder could earn an interest of up to 0.23%. For example, if you save £1000 monthly in an emergency, you could save £12000 with a claim of £276 annually.

The size of the total amount you could save depends on your lifestyle, liabilities, monthly expenses, income, and dependents. For example, a single woman with one kid could save more than one with two kids. Do not miss the payments. Yes, you can, but it may affect your future goals. It helps you make intelligent judgments and arm you for the unforeseen.

At times the monthly income and benefits fall short of the requirements. For example:

 What if you encounter a serious medical problem requiring urgent treatment? And the worst part is that you have tapped the emergency fund once and cannot do so now. Waiting for help may delay the treatment. Instead, contact the best private money lenders in the UK. These could help you get the needed funds at minimal eligibility. In the face of financial distress, no-obligation money fits the curve nicely.

4)      Avoid piling up debts

Single parents must work more towards increasing their savings. It involves lowering the debt part. Analyze how much high-interest debt you share in your profile. Define a plan to pay these off gradually if you are employed and find it challenging to maintain expenses within the pay. Seek alternative income options that could bolster the overall income.

It would help you ensure flexibility and accomplish every financial commitment without defaulting. This way, you could easily manage the expenses and the debt repayments. However, working and managing a child as a single mum may be challenging. For this, you could seek home-based jobs that allow you to work on child needs and earn simultaneously.

5)      Apply for Child benefits

The government in the UK provides the flexibility to single parents to check out the child benefits. The government offers a monthly payment allowance to boost the household budget. The payment you get here is based on the total number of children as the primary criteria.

As per the UK Government declaration for the tax year 2022-23, “You can receive £21.80 a week for the eldest child or the only child and £14.45 for any additional child” The benefit of £21.80 a week totals to £1,133 a year.

If you or your partner earns above the threshold of £50000/annually, you would have to pay 1% tax on £100. Likewise, if the income exceeds £60000 or above, you will have to pay back the full child benefit.

Anyone responsible for raising a child under 16 years old (or 20 staying in approved training) can qualify for the child benefits. In this, the child must be living with you, or you must be paying for their care and treatment.

Child benefits continue for up to 20 weeks in the case of a child 16- or 17 years old joining the army or government-sponsored services. In some situations, the authority may cease the benefit. If the child grows up fetching a suitable employment opportunity. Here are some conditions that the government may stop it:

• Your child works in an apprenticeship in England
• Enroll in a job opportunity with working hours 24 or more a week
• Receive benefits in other forms like income support, support Allowance, or tax credits

Bottom line

It is how you can carefully manage your finances and budget accordingly. It will help you create a comfortable lifestyle for yourself and your child. Parenting calls for apt financial decisions. These will help you manage finances well.