Single Parent Finances: Three Things to Keep in Mind

Single parents face many unique challenges. Not only may you be dealing with the emotional toll of divorce, you’re now required to raise your kids on one income. Even if you still have help from your ex, you need to figure out how to reallocate your budget and deal with any joint debt—not fun.

Just remember, there is a light at the end of the tunnel. As you begin this new chapter of your life, here are some things to keep in mind:

1. You Got This!

After a divorce, you may experience a period of self-doubt. This is normal. However, it is important to not let those feelings of uncertainty get in the way of your financial goals

Paying off debt, saving for college, and building a retirement fund are crucial to you and your family’s future. Plus, making progress towards a goal can actually be rewarding and boost your confidence.

2. Split Up Your Debt

Couples who held joint credit card accounts should separate their debt. Ideally, you or your ex can transfer the individual portion of the debt to a different card. However, if your expenses are difficult to untangle but the divorce is amicable, an even 50-50 split may be a peaceful solution.

Just make sure you remove your name from the joint account. In the event that your ex fails to pay an agreed-on share of the debt, it can hurt your credit score.

3. Talk to Your Kids About Money Sooner Than Later

On a limited income, you may not be able to sign up your children for as many extracurricular activities or go on as many vacations as you used to.

However, you can ease the transition into your new lifestyle by explaining your financial situation. Introduce them to the concept of a budget, and let your kids know that you have spending limits. And speaking of a budget, make sure you start tracking your expenses and figure out ways to save.

Being a single parent is not easy, but if you stick to your goals, separate your joint debt, and talk openly with your kids, you can continue to financially thrive.

BALANCE