- November 29, 2022
- Mark Elwes
6 Financial Moves Every Single Parent Should Make
Table of Contents
Parenting is a beautiful moment with additional responsibilities and, of course- EXPENSES. Adjusting your existing budget parameters and income, and controlling outgoings, requires earning extra for a comfortable living.
While embarking on this journey, precise preparation could help eliminate financial surprises. So, you should be on your toes from the days before the baby arrives and a week after.
And with increased living costs and accompanied by a pay freeze, the individual finances get compromised. Single parents are vulnerable as they manage all household costs with a single income source. If you are the one, know how to manage finances as a single parent.
The blog states some ways to take charge of your finances and manage every new expense with childbirth just hassle-free.
How to Manage Finances as a Single Parent?
Single parents generally have low income owing to the flexibility they need with child care and take time off at short notice. With reduced access to benefits as a current Government strategy, parents find it ever more challenging to meet the ends.
Even if you eliminate discretionary expenses from the league, liabilities swipe one of the budgets. However, single-child parents can leverage universal credit, Housing Benefits, and Council Tax Benefits, but what if these do not suffice or you do not qualify for one?
Here you need something that provides needed assistance. Borrowing funds can be an option as loans for single parents may be an active way to rationalise all your dreams without missing out on creating the best experience for your newborn child. With easy repayments, you can easily manage these along with essential expenses.
These help you cater to any new financial change without panicking at affordable interest rates. You may check out one for immediate requirements or long-term planning.
Quickly check other ways listed below to manage finances with a new member added to your family.
1) Have a Junior ISA account
Use the money you saved from eliminating discretionary purchases in setting up a Junior ISA account. It is long-term tax-free savings account for children. As per the new rule 2022-23, the savings limit for Junior ISAs is- £9000. To qualify, the Children must be below 18 years of age and should be living in the UK.
You can invest in it through cash ISA or stocks and bonds. Here, you would not be paying any tax on the capital gains or dividends you receive. Single parents share the flexibility of investing in both if they must. Apart from this, you can teach your kids good savings habits when they reach a potential age.
2) Explore the best insurance plan for your child
Do you have a health insurance plan in place? If yes, it would be a great idea to add your newborn to it. Or, if you did not, check out the best health insurance plan for your child as per your lifestyle and income.
Most insurance plans call for adding the child into the insurance plan within 30-60 days of the birth. The insurance company must be aware of the child’s birth and add it to the existing health insurance plan. New moms can qualify for maternity insurance coverage. It may include the newborn baby financing needs too.
3) Stick to budget while shopping for baby’s essentials
When a new person enters your life, you feel like buying the world for them. However, rationalising every temptation may clutter up your finances before the final welcome of the little one. If you are worried about buying baby essentials in the early days of delivery, here are vital things to think about:
a) Baby car seat
It is the very prime concern that you must think about before conceiving. A comfortable baby car seat ensures a safe delivery without impacting the delicate body.
b) Buying a pram/ pushchair
It should be suitable for a newborn child, inclined entirely flat. If you do not like it, you could use a sling or baby carrier as a cheap alternative. You may need it if you are on frequent travelling trips with your little child a few months later or in a regular drive away.
c) Cot Bed, baby crib
Similarly, choose the best budget cot bed and baby crib for your child. Prioritize the comfort of your child and the weight. Every child is born different. It is a must-have if you often find yourself at the airport.
d) Feeding essentials
It depends on how you wish to feed the baby. There are excellent baby food products available in the market to choose from. Check out the one with the best potential under budget.
Those essentials can be expensive sometimes. If you are short of funds or do not want to disturb your savings, you can contact private lenders in the UK to have desired funding and to rationalise all your first baby aspirations.
You may qualify for a suitable amount as per your requirement and concerns. Private lenders like Extramilefinance help you with the right loans as per your requirement and get the money the same day.
4) Set up an Emergency Fund
An emergency fund ensures savings to counter any critical requirements without panicking. Whether you are a business or an individual looking forward to starting a family, you must have one. In this, ensure savings of up to 6-12 months.
It provides a comfortable cushion for a new parent searching for a job. It is essential, mainly when your family relies on a single-member income.
Be mindful that an emergency fund is sincerely for only serious money concerns like paying for family needs in unemployment- like medicines, rent, and other unpostponable concerns. It is one of the best ways to do so if you are exploring facts about how to manage finances as a single parent.
5) Start saving for your child’s college tuition fee
According to recent statistics, the average tuition fees for students have risen since 2020. And as a matter of fact, only 13% of parents focus on saving for a child’s tuition fee as a priority. It is okay amid other liabilities like rent, living requirements – food, essentials, bill payments, etc.
While it may not seem like an immediate priority, you must think about it and have a plan. The sooner you start saving for your child’s tuition fee, the more options you will have. Moreover, if you are a parent with a low income, you may leverage some concession on school meals if you receive any of the below benefits:
- Child Tax Credit
- Universal Credit
- Income Support
- Income-based Job Seeker’s allowance
- Income-related Employment and Support allowance
- Guarantee Credit
6) Check for the affordable labels/ discount codes
Sometimes, it is essential to fund according to income. Therefore, having a budget is the first thing, and looking for discounted items for your kid and survival is another. You can check offline, too, alongside online, for discounts. You may find something interesting with the essential Christmas deals going out.
Well, what if the needs do not meet the income despise discounts?
Waiting until long to meet urgent expenses for a child could affect the charm of the moment. External options like loans for single parentscan fund expenses if current income does not suffice. Tick all the items on the checklist and ensure a peaceful sleep.
If you often seek how to manage finances as a single parent, these ideas may help. Check out the best tips to save for long and short-term needs before landing the new phase. Starting early is the best way to track finances and avoid surprises.
Mark Elwes is the Editor-in-Chief at Extramilefinance. He is a notable member of the content strategy team since his joining in 2017. Driven by his fondness for the finance industry, he has spent years gathering as much knowledge as possible about various financial products that include loans also. Previously, Mark worked as a senior journalist writer with experience in writing blogs and articles.