Planning a budget can be a daunting task for single moms. Apart from the usual budgeting challenges, single moms also face the difficulty of managing things without the extra income from a spouse. Are you a single mother trying to plan a household budget? If yes, then you should understand that you need careful planning to prepare it. Read the following guidelines carefully:
- Food: Around 20% of your income should go towards food. You simply cannot survive by eating less than that.
- Utilities: This includes heating, electric bill, sewer etc. Your utility bills should not be more than 10% of your gross income.
- Medical expenses: With sufficient medical insurance, your medical expenses should be within 5% of the gross income. This includes variable medical expenses like visits to the family physician, payments towards health savings account, etc.
- Entertainment: This should be strictly below 5% of the gross income.
- Savings: Whatever your expenses might be, make sure that you contribute at least 5%-10% of your income towards savings.
- Mortgage and other debts: Most mortgage companies recommend that single mothers keep their mortgage payments below 20% of the gross income. Another important thing is your debt to income ratio. This is the percentage of your income that is used for paying debts. A healthy debt to income ratio will always be below 30%. This means that less than 30% of your income should go towards your debt payments.
The above tips should give single moms idea about how to prepare a basic budget, but individual needs can and will vary. The above percentages do not equal 100% due to this reason. Also, it is worth mentioning that single moms can benefit immensely by using free online budgeting softwares like Mint.
Here are a few tips which can help single moms survive in a difficult financial climate:
- If you are a single mom, make sure you file for child support. This will make things financially easier on you. Sometimes, the father might refuse to pay and a legal battle might follow, but you shouldn’t give up!
- Secondly, you may also count on government assistance. WIC (Special supplemental nutrition program for women, infants and children) is one such program. This is a federal healthcare program for low income women and children under the age of five).
- Thirdly, you should know how to combat debt issues. If your debts are under control, check out debt reduction techniques such as debt snowball and budgeting. With overwhelming debts, you might have to resort to debt consolidation or debt settlement.
- Since you are living solely on your own income, it may be a smart idea to compromise on your standard of living. For instance, if you are living in a luxurious apartment, you might consider moving to a cheaper accommodation.
Guest article by Amy Lewis, who associated with Oak View Law Group, a bankruptcy law firm. She writes on a wide range of financial topics like credit card debt settlement, debt management, debt consolidation, bankruptcy etc.
