Managing Your Finances As a Newly Single Mum (Or Dad)
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You can probably tell from the title of this post that I have some news…my ex and I are separating. I’m not going to go into the ins and outs and the details, but I thought that I would have to mention it so that you all understand why my finances are changing.
When you become a single parent, it can be a bit of a shock to the system – regardless if you were the one who gave or received the news. How it all goes down will also ultimately affect and decide on how the financial situation is between the two of you.
Hopefully, you will both go about the separation amicably, and will able to talk through things sensibly to find the best solution for all of you. If not, you will unfortunately have to go through a solicitor and fight for your money and assets.
Fortunately in my situation, we are being amicable about it and have had decent conversations about finances.
If you are a single mom starting over low income or wondering about how to do finances in a single parent home, this article is for you.
#1 Think About Housing
With housing, there are a few options that you could consider with your ex-partner:
- You stay in the house and he pays you spousal support to cover the additional costs (e.g mortgage)
- He stays in the house and you move in with family/rent somewhere
- You both move out and sell the house
Obviously there are other possible choices but these are the most likely. Also before anyone bites my head off I am writing this from an average woman’s point of view, I am aware that there are women who earn more than their partners!
At the moment personally, I am in the house with our daughter, and he has moved in with his parents. It works out best for us this way at the moment as my mum has moved further away, school and work are nearby, and his parents have 2 spare rooms (one that he can stay in, one that our daughter can stay in).
This is where your finances begin to change. You are generally going to have to spend some more money – whether that be from renting or covering the current costs.
For me, I don’t want to have to rely on him, so I am preparing myself for the possibility that the house will be sold and that I will need to find somewhere to rent. I have started looking at places to rent in the area – and wow – they are expensive!
This is definitely something that I would recommend you do – be prepared for the eventuality that you could be moving out and renting somewhere else. Have a search for local property in your area and don’t be tempted to get a palace when you could be saving your money for something else.
#2 What Help Are You Entitled To?
This is really important, especially if you think that you will not be receiving help from your ex. You need to check and apply for whichever benefits that you are entitled to, and do it sooner rather than later because it will probably take a few weeks (or longer) for them to sort out.
If you are in the U.K, go on the gov.uk website and use the benefits calculator – where you will input all of your information and it will work out what you should be entitled to.
You will need to work out how much child maintenance you get as well. Hopefully you will be able to come to an amicable agreement with your partner, but it still throws up the question, how much exactly should you be getting from them? It depends on a few factors, such as how much they earn, how much you earn and how often your child stays with them. You can use the Child Maintenance Calculator to work it out if that helps.
Look into getting some free legal advice as well – speak to your local Citizens Advice and they will help you through it all.
#3 Adjust Your Budget
I’ve created this budget workbook for you to be in control of your finances once and for all. Not only is it super pretty, it’s really simple to use as well. Girl, I got you.
You may need to adjust your budget with the changes in money, or even make a whole new one! If you haven’t budgeted before, now is definitely the time that you need to start.
But don’t worry, it’s really simple and straightforward – and it will mean that you can see exactly how much money you have and how much you spend each month.
I have a few posts about budgeting that discuss it all in detail that I suggest you read through, but for this post I will just mention my favourite type of budgeting – the Zero-Sum budget. I was using it without realising that was what it was called! It’s really easy, and I wouldn’t budget any other way now.
Basically, it is where you allocate all of your money to a certain place. So say you have £1000 per month coming in – you need to allocate all of that £1000 to different categories.
If you don’t do that, what tends to happen is that after paying bills, you see all of the money that you have left over, and think that you can go and spend it all on the things that you have been lusting over such as new clothes or loads of meals out. What this means however is that many people are not reaching their financial goals because they are not putting money aside for them each month.
It’s kind of impossible to save money for a new holiday, a new house, retirement – whatever it is that you are saving for – if you don’t actually save any of the money! That is where the Zero-Sum budget comes in and saves the day.
You need to first work out all of the money that you have coming in, whether that be from your income, new benefits that you will be receiving, child maintenance payments etc.
This is why it is helpful to speak to your ex and work out how much he will be giving you each month. However – I don’t recommend relying on him to do this – but for the sake of budgeting, we will assume that we will be getting the amount agreed.
Once you know how much you have coming in each month, you need to look at how much you have going out each month. Look at your internet banking in the direct debits section, or at your bank statements, and write down everything that comes out each month.
There may also be recurring fees which you could forget such as kids lessons, annual insurance etc. Go back through as many as you can, because it’s really important that you don’t miss anything.
Write down all of the expenses, and if you have any left over, allocate this to a job as well. You may want to put it in savings or into a sinking fund (both are very important and you should really strive to do this).
Another good thing about budgeting is that you can see areas where you are overspending or just spending unnecessarily. Not many people like to admit that they are spending too much, but we’ve all been there!
Take a look at your budget categories and see what you could reduce or eliminate. Now I don’t mean things like house insurance or life insurance, but things like warranties that you don’t need, that dreaded gym membership, the all-singing-all-dancing TV package when you only watch 2 channels.
Food shopping is often a category where overspending occurs, because we can tend to think with our stomach instead of our head! Practising things like meal planning will really help you to keep on top of your grocery bill.
#4 Allow Yourself Some Treats
When your budget has changed and you need to adjust everything, it can be awfully tempting to cut everything down to the bare bones, especially if you are stuck in limbo.
However, I think it is important to allow yourself room in your budget for some treats. You’re going through a big life change – a very emotional and potentially stressful one – and doing things that will make you happy should be high up on your list.
This could be getting a takeaway in, going for a night out with friends, doing your hobby (hockey in my case) – whatever it is that you want. It will be good for you to do this, so don’t feel bad about spending money on yourself.
Try and get a support network together for yourself as well – don’t feel bad about asking for help, as you will likely need it during this difficult time.
#5 Focus On Earning Extra Money
This is as good as an opportunity as any to start earning some extra money for yourself and your family, and it may end up being essential. I would always recommend to not rely on one income stream, or even the benefits and child maintenance that you are promised.
There are unfortunately many, many occasions where benefits have been stopped (and people have had to pay them back) and where child maintenance is not paid.
There are lots of different ways that you can earn extra money – the most obvious being to increase your hours at work or find an extra job. I have started looking at weekend jobs as my daughter will be with her Dad on the weekends. Take a look at job sites, I find good ones are Indeed and Gumtree.
If you are unable to get out of the house to work any more due to needing to be at home with your children, there are a variety of different ways that you can earn extra, such as:
- Dog boarding, dog walking, cat sitting, small animal care*
- Mystery shopping*
- Entering surveys*
- Entering competitions*
- Matched betting*
I’ve also put together a post of 100 ideas that you can make money on the side which should hopefully help with some ideas. It’s always a bit nerve-wracking starting something new, but earning extra money will give you the security that you will really need. Earning extra money has enabled me to do so much more and be much happier than when I wasn’t.
Over to you – can you think of anything that would help with managing finances when you are a newly single parent?