Managing money for your household is no small task. Plus, if you’re already raising kids, the added pressures of figuring out everyone’s finances can be a major headache – metaphorically and literally. To help you get on top of the money management challenges and feeling strong and healthy about your finances, here are a few top financial tips especially for parents.
Live Within Your Means
As a parent, it’s natural to want to give your kids absolutely everything they ask for. But just remember – the best gift you can give your kids is a healthy understanding of how to live within their means. Before you hit the supermarket or department store, have an honest, age-appropriate talk with your kids about what’s on the shopping list and what you can afford. Then, if they ask for a new toy or special treat while you’re out shopping, don’t have an argument – simply explain that it’s not in the budget, and move on. While it can be hard to say no to kids, teaching them to buy what they can afford – rather than going into debt to get the “cool new thing” – is an invaluable lesson that will stay with them for a lifetime.
Keep An Emergency Savings Account
Everyone needs an emergency fund stashed away for a rainy day, and this is doubly true for single parents. Childhood are full of unexpected expenses, for a visit to the doctor to repair a chipped tooth, to a new costume for the spring play, to extra spending money for an upcoming field trip. A strong emergency fund should contain the equivalent of three months of living expenses for your household, but if you can’t quite afford to set aside that much money, don’t worry – even just a few hundred dollars is a great starter safety net for you and your kids. Most importantly, do your best to never dip into the fund unless it truly is an emergency situation.
Know What Your Owe – And Pay It Down
Living with debt is tough for anyone; with kids or without. But for parents, having the additional burden of debt on top of all the family’s other everyday expenses can be a major source of stress. This year, aim to get the debt out of your life once and for all. Start by simply figuring out what you owe. Calculate debt owned across credit cards, your home mortgage and any auto loans. Other loans such as your student loans might also be a source of debt, and it’s even possible that some of your debt is associated with your kids’ other parent. Once you know what you owe, make a proactive yet feasible plan to pay it down. This might mean shifting funds away from some leisure time activities for a few months, but in the end, you’ll have a much more solid financial foundation without the debt hanging over your head.
Teach Your Kids About Finances
It’s never too early for kids to learn about spending, saving and budgeting. Very young kids might enjoy getting an allowance and saving for small purchases. If you can’t afford an allowance, demonstrate the fundamentals of finance by talking about how you divide the household expenses. Get them involved in the decision making process; for example, if there’s a certain amount of money set aside for family fun every month, have your kids vote on how the funds are used – ice cream, or a movie? When kids have a say in the choice, they will better understand what “affordable” really means and they will enjoy the family outings even more knowing they played a role in deciding what activity to do.
Don’t Neglect Your Needs
It’s just like on an airplane – you must apply your own oxygen mask before helping others. Don’t scrimp and save so much that you’re neglecting your own needs. It’s okay to spend on necessities and even splurges for yourself, and it’s never a bad lesson for children to learn that parents are important too. Especially as a parent, budgeting for yourself, and your parent is an important way to set aside time and money for self-care so that you can be the best possible caregiver for your kids, and yourself.