Money Saving Tips For Single Parents Includes Much More Than The Basics
The most troubling fact about single parents is the low income that restrains a lot of activities. As the entire family depends on a single income, there are lots of areas that need to be compromised. In such a situation, saving money every month seems next to impossible. However, if you look beyond the basics of saving money, you will find there is n-number of ways to create a steady savings account.
These tried and tested money saving tips are suitable for anyone regardless of their financial situation. It is all about your willingness to stick to your budget and commitment to saving money for the long term that matters. It is how you regard your future as well as that of your children. It is only then you will not only make two ends meet but will also be debt-free for years.
Setting up automatic payments
Ideally, the best possible way apart from the basics in which you can save money as a single parent is by setting up automatic payments for all your fixed expenses. When your monthly bills start to come in your mailbox, saving money as a single mom or dad seems so overwhelming. However, if you make it a point that all these fixed expenses are paid automatically as soon as they are due, you can combat these easily and reduce your stress.
This is an effective way that you should follow even if you are debt free. There are specific reasons for it such as:
- You will never be able to spend this money as you will never see it. Once your paycheck is deposited into your bank account, these payments are either paid up, or the money is set aside in another sub-account.
- Another reason for paying your fixed expenses this way is that you will not have to worry about making such payments within the due date and therefore you will never miss any deadlines and incur penalties. You will save on the late fees.
Since these are your fixed expenses and you cannot live without them, dillydallying with the payments is unwise. It will lead to stressful situations and loss of money as well.
Bills to put on auto pay mode
There are a few specific bills that you should certainly put in an auto-pay mode and forget about them:
- House payment – You can easily draft it by your bank. It will be very helpful for you if you make an additional house payment each year. If you have it paid bi-weekly, it will be easy for you to have half of the house payment moved into separate savings account as and when your paycheck is deposited. That means your house payment will be automatically withdrawn from your savings account instead of your checking account. Talk to your bank to set up such a payment mode.
- Utilities – You have to pay for water, gas, electric, cell phone, house alarm, trash, and even charity. These essential payments can also be set up to be paid automatically either through a credit card or your checking account.
Consider the pros and cons
Choose the right option that makes sense and is feasible for you. However, while choosing your mode of payment through credit card especially, there are a few pros and cons that you should consider. The downsides to consider are:
- Credit card payments may sometimes carry fees for such a setup
- If you know that you cannot pay off your credit card debt every month, then stay away from this route
- If you already have any debt in your credit card, then this is not a feasible option for you.
The pros of credit card payments are:
- Credit card bill payment will be due just once during the month along with all your bills. That means you can make the full payment at the end of the month after you have received and deposited two paychecks.
- Another advantage of setting a credit card for your bill payment is that most credit cards usually come with specific cash back program. That means when you pay through your credit card you simultaneously earn points or cash back just thereby saving some dollars in the process.
However, you must make no exceptions in paying your credit card bills on time as these debts carry the highest rate of interest that can accumulate fast into your debt making your financial situation worse. To know what a credit card debt can do to a person if not paid and appropriately managed, you can read the debt settlement reviews to be well informed. These reviews will tell you how a credit card debt affects the credit score and history and make life miserable.
Save money in multiple accounts
Another useful way to save more money as a single parent even after meeting all your household expenses is by creating multiple savings accounts. This is simple math. If you have one saving account only and save $100 in it, then it starts and ends there. After a year you have $1200. Alternatively, if you have two or three savings accounts, you will automatically save more money.
Most banks now allow customers to have as many savings accounts as they want with a minimum balance of as little as $5. If you create such separate savings accounts, you will not only save more money but will also have a fund created to meet with your variable expenses as well.
Different types of savings accounts can be created to begin saving money such as:
- Escrow account – Create such an account having a definite amount of money transferred automatically after each pay period. This money can be used for house insurance, real estate taxes.
- Christmas – Single parents find it difficult to spend on gifts during Christmas, birthdays or any festival. If you set aside some money, then you can avoid the real struggle during these times of the year.
Check with your bank or any credit union and set up such an account so that the money saved is transferred automatically to your checking account in November.