Having been a single mom for several years now, I have finally acclimatized myself to my status. It is indeed hard carrying the responsibility of children on my shoulders alone. But I do love the perks I am able to monopolize. I am the sole beneficiary of the kids’ hugs, kisses, and love.
As a single mother, I face a lot of challenges. Most I can handle very well, but the immediate concern that I always have to resolve are financial problems. Missing due dates on debt mean additional costs and having insufficient funds can cause a lot of stress. We don’t want to be worrying about paying for the basic needs of the children. Thus, financial stability is important for a single mom.
The first step on the road to financial stability is debt management. Whether you’re an individual or a corporation, debt can be your downfall. In this day and age, almost everyone has debts because of credit cards. It can go further with mortgages on houses and vehicles. There is nothing wrong with debt because it does give us the opportunity to acquire things with only the prospect of future earnings. Nevertheless, it is necessary to manage our debts and only incur those that we can afford.
If you’re already deep in debt, is there a way out? Yes, there is. And the faster we remedy the situation, the better. The goal is to minimize the interest expense or penalties that we will incur before it reaches a point that we can no longer make the monthly payments. For single parents, this is very critical because they will not have anyone else to rely on but themselves while the children depend on them for sustenance.
The first thing to do is list down all your debts, the corresponding monthly payments, and the interest rate for each one of them. The interest on each debt is important because we need to determine which of the debts are more expensive. Now, match these with your monthly earnings. After all the estimated expenses, do you have enough to pay your debts regularly? If it is insufficient or even tight, then it’s time to reduce your monthly payments. You can reduce your monthly installments by (a) partial debt payment with savings, (b) consolidating your debts at lower interest rate, or (c) restructuring any of them by extending the terms to reduce the monthly payments.
What would be the best option among them? It will depend on what your current status is and what options are available to you. If you can consolidate them into a single debt at lower interest rate, that would be the better option. However, those who are more confident in the security of their employment may opt to reduce debt through partial prepayment of the debt with their savings. When reducing your debt, prioritize those with higher interest rates.
Whatever option you choose, remember that the goal is to reduce the cost of debt (interest) or the debt itself. And of course, while you are deep in debt, stop incurring more immediately. Cut off those credit cards and start saving on your expenses. Financial stability is not a difficult feat for single parents. It only takes prudence and discipline. If you need motivation, just keep in mind that the reason for all your hard work is that tiny person who gives you warm hugs with milk and cookies.
Samantha A. Gregory is an author, consultant, and speaker. She’s a single-mom lifestyle, money, and parenting expert featured in The Washington Post, The New York Times, Essence Magazine, HuffPost, ABC News, and Mint.com.
Samantha founded the award-winning RichSingleMomma.com™, the first online magazine featuring personal finance, parenting, and personal development content and courses for single moms.
She aims to inspire women who are ready to thrive and not just survive in their single motherhood journey. Connect with her on Instagram @richsinglemomma.
Good post!!!! Another tip for single moms is to live within your means and not try to compete with someone else. Can you write about that and how we can accomplish that? I really enjoy your blog, we single moms are strong, aren’t we!
Patrice I will totally agree. Comparing and competing with others is a complete waste of time. I’ll start thinking about and writing an article on that topic. I’ll likely post it on my other blog, Single Moms Rock! I’ll provide a link when it’s up.
Thanks for being a faithful reader! 🙂
You’re right! I should work on with my credit card bills. That would help me save more.
guilty as charged! i always compete with other people and i still feel empty. what would be the best way for me to feel better? can you share some advice with me? thank you!
Good resources here, All the best!
Jessica, i really agree! Credit Cards help save! good post.