As a single parent, how can I turn my financial situation around?
Being a single parent is tough, there’s no way of sugar coating it, men and especially women can be hit hard with financial stress. On average, men usually earn more than women but most children stay with their mothers, meaning the added expense and lower wage hugely impacts single mothers.
According to a study conducted in 2016 by AMP and the National Centre for Social and Economic Modelling, single parents who are aged 45 or less have 36% fewer assets than parents who are together. Based on the data released by ABS, in 2016, 18.2% of single parents were male and 81.8% were female. We have put together some tips and tricks to help you financially if you find yourself in this position.
Write a detailed budget plan
To assist in improving your financial situation, it is important for any single parent to start with their budget! Make sure you write up a budget plan that is as detailed as possible and include all expenses and loans, the more detailed and realistic it is, the easier it is to follow.
Here is a simple way to on how to do a budget.
Wants vs Needs
Being a single parent is all about juggling and sacrificing, especially the want for luxury items. The old habit of ‘emotional spending’ has to go. Instead, if you are faced with a temptation to buy something that is out of the ordinary, you’ll need to ask yourself ‘do I really need this?
Being a single parent can mean cutting down on costs becomes the norm, however, there are still areas for improvement including not being wasteful. With food, there are exciting ways to be clever with cooking, and there are many great recipes and ideas online for nutritious meals on a budget.
Old clothing can be ‘upcycled’ into cleaning rags, and are perfect for cleaning windows or polishing the car! Remember to check with the school uniform shops and community social media pages for second-hand uniforms, some op-shops also have dedicated areas so you can save on those expensive but necessary bits and pieces.
Credit Card spending
It is very important to be careful when using credit cards. It may be easy to use the money today to cover a few expenses, but it’s not worth the further financial stress it will put you through when you have to pay the interest on the cards. If you can’t get rid of your cards, hold onto them for emergencies only and save it as your last resort.
Explore your work or study options
As a single parent relying primarily on government assistance, the decision to go back to the workforce is a huge step. The ability to earn an income is our biggest asset, if you are unable to find any jobs in the short-term, consider studying for a qualification that can open more opportunities for you. This will be an investment and chance for you to earn an income, potentially more than what you would have had you not received the qualification.
Child Care costs
You should also look into applying for a Child Care Benefit or Child Care Rebate as you may be eligible to receive either or both. A Child Care Benefit is when the government subsidises approved child care costs and the fees will be paid directly to the child care service provider. A Child Care Rebate is an additional payment to the Child Care Benefit where it helps families cover the out of pocket costs. Even if you are not eligible for Child Care Benefit, you can still apply for a Child Care Rebate.
Talk to Centrelink
Have a chat to your local Centrelink regarding entitlements to single parents. There are many benefits available for single parents. If you have at least one child that is under the age of 8, you can apply for a Parenting Payment. You can also receive extra assistance to young parents who are under the age of 19, and those parents who are raising teenagers can apply for a Family Tax Benefit Part A. Centrelink can also provide you with a Health Care Card if eligible, we have listed some of the benefits below:
• savings on prescriptions
• bulk billing for doctors
• concessions for public transport, car registration, rates and electricity.
Make sure you are covered by your insurance
Now you can see the light at the end of the tunnel, make sure your insurance up to date. The last thing you want is to have to pay out for big-ticket items, like your car or your home. Also by keeping yourself insured, you and your income will be covered if there is an accident, injury or illness. This means that if you are unable to work your insurance provider will cover your projected income, and your family won’t go without. A cost-saving way of ensuring you are adequately covered for personal insurance could be through holding the insurance policies through your personal super fund.
Remember to take your time with decisions and be aware of your financial position so that the choices you make today do not come back to haunt you in the future. If you are experiencing financial hardship or struggling with debt, Debt Rescue is here to help.