Saving money and budgeting as a single mum can be challenging. You have to juggle the demands of raising a family on one income, while also planning for the future and dealing with unexpected expenses. However, with some smart strategies and helpful tips, you can make your money go further and achieve your financial goals. Here are 9 ways to save money and budget as a single mum in the UK and the US in 2023.
1. Create a realistic budget
The first step to saving money and budgeting as a single mum is to have a clear overview of your income and expenses. You need to know how much money you have coming in and what you are spending it on. A budget can help you track your cash flow, prioritise your needs, set spending limits, and identify areas where you can cut costs or increase income.
To create your budget, start by listing all your sources of income, such as wages, benefits, child support, or alimony. Then list all your fixed expenses, such as rent or mortgage, utilities, transport, food, and childcare. Next, list all your variable expenses, such as clothing, entertainment, gifts, or hobbies. Finally, list all your savings goals, such as an emergency fund, retirement fund, or education fund.
You can use an app like Money Dashboard to connect your accounts and categorise your transactions automatically. This can help you see your balance and spending patterns at a glance. You can also use tools like Entitled To’s benefits calculator to check if you are eligible for any financial support from the government.
2. Build an emergency fund
One of the best ways to save money and budget as a single mum is to have an emergency fund. This is a stash of cash that you can use to cover unexpected expenses or income loss, such as a car repair, a medical bill, or a job loss. Having an emergency fund can help you avoid going into debt or dipping into your savings goals when something goes wrong.
Ideally, your emergency fund should cover at least three months of your essential expenses. However, you can start small and build it up gradually. You can set up a separate savings account for your emergency fund and automate a monthly transfer from your checking account. You can also boost your emergency fund by saving any extra income, such as tax refunds, bonuses, or cash gifts.
3. Cut down on unnecessary expenses
Another way to save money and budget as a single mum is to reduce your spending on things that are not essential or that you don’t use. You can do this by reviewing your budget and looking for areas where you can trim costs or eliminate waste. For example:
- Switch to a cheaper phone plan or cancel any unused subscriptions
- Shop around for better deals on insurance, utilities, or banking products
- Use coupons, vouchers, or cashback apps to save money on groceries or online shopping
- Cook at home more often and make packed lunches for yourself and your kids
- Sell or donate any unwanted items that are cluttering your home
- Cancel any memberships or services that you don’t use or enjoy
4. Find free or low-cost activities
You don’t have to spend a lot of money to have fun with your kids or treat yourself. There are plenty of free or low-cost activities that you can enjoy as a family or on your own. For example:
- Visit the library to borrow books, movies, or music
- Go for a walk in the park, a bike ride, or a picnic
- Check out local museums, galleries, or festivals that offer free admission or discounts
- Join a community group or club that shares your interests or hobbies
- Host a game night or movie night with friends or family
- Take advantage of online courses or resources to learn something new
5. Increase your income
If you want to save more money and budget better as a single mum, you may need to find ways to increase your income. This can help you cover your expenses more comfortably and achieve your savings goals faster. There are several ways to boost your income, depending on your skills, availability, and preferences. For example:
- Ask for a raise or promotion at work if you deserve one
- Look for a better-paying job or a side hustle that suits your schedule
- Sell your skills or services online through platforms like Fiverr or Upwork
- Start a blog, podcast, YouTube channel, or an online store and monetise your content or products
- Apply for scholarships, grants, or bursaries if you want to pursue further education or training
6. Save for your children’s future
As a single mum, you may want to save money for your children’s future, such as their education, first car, or first home. This can help them achieve their dreams and reduce their financial burden later in life. However, saving for your children should not come at the expense of your own financial security. You should only save for your children after you have paid off your debts, built your emergency fund, and contributed to your retirement fund.
There are different ways to save for your children’s future, depending on your goals and preferences. For example:
- You can open a Junior ISA (JISA) for each child under 18 and save up to £9,000 per year tax-free1. You can choose between a cash JISA or a stocks and shares JISA, depending on your risk appetite and investment horizon. The money in the JISA belongs to your child and they can access it when they turn 18.
- You can open a regular savings account or a fixed-term bond for each child and deposit money regularly or occasionally. You can find the best savings rates on platforms like Uswitch or Money To The Masses3. However, you will have to pay tax on the interest earned if it exceeds £100 per year per parent. You can also decide when and how to give the money to your child.
- You can invest in a trust fund or a stakeholder pension for each child and benefit from tax relief and compound growth. However, these options are more complex and long-term, and you may need professional advice before choosing them. You should also be aware of the fees, charges, and risks involved in investing.
7. Get out of debt
Getting out of debt is one of the most effective ways to save money and budget as a single mum. Debt can drain your income, limit your choices, and damage your credit score. It can also cause stress, anxiety, and depression. Therefore, you should aim to pay off your debts as soon as possible and avoid taking on new ones.
There are different strategies to get out of debt, depending on the type, amount, and interest rate of your debts. For example:
- You can use the snowball method, which involves paying off the smallest debt first while making minimum payments on the rest. This can help you build momentum and motivation as you see your debts disappear one by one.
- You can use the avalanche method, which involves paying off the highest-interest debt first while making minimum payments on the rest. This can help you save money on interest and pay off your debts faster.
- You can use the balance transfer method, which involves transferring your high-interest debts to a low-interest or interest-free credit card. This can help you reduce or eliminate interest charges and consolidate your debts into one payment. However, you should be aware of the fees, terms, and conditions of the balance transfer card and pay off your balance before the promotional period ends.
8. Protect yourself and your family
Saving money and budgeting as a single mum also means protecting yourself and your family from financial risks and uncertainties. You never know what life may throw at you, so it’s wise to have some insurance and legal documents in place to safeguard your assets and your loved ones. For example:
- You can get life insurance to provide a lump sum or regular income to your children or other dependents if you were to pass away. You can choose between term life insurance, which covers you for a fixed period of time, or whole life insurance, which covers you for your entire life. You can compare life insurance quotes on platforms like MoneySuperMarket or Compare The Market.
- You can get income protection insurance to replace part of your income if you are unable to work due to illness or injury. You can choose between short-term income protection, which covers you for up to two years, or long-term income protection, which covers you until you retire or recover. You can compare income protection quotes on platforms like Money.co.uk or Confused.com.
- You can get critical illness cover to provide a lump sum if you are diagnosed with a serious illness, such as cancer, stroke, or heart attack. You can use the money to pay off your debts, cover your medical expenses, or improve your quality of life. You can compare critical illness cover quotes on platforms like GoCompare or uSwitch
- You can make a will to specify how you want your assets and belongings to be distributed after you die. You can also name a guardian for your children and an executor for your estate. You can make a will online using platforms like Farewill or Beyond, or consult a solicitor for more complex cases.
9. Seek advice and support
Finally, saving money and budgeting as a single mum can be easier and more enjoyable if you seek advice and support from others. You don’t have to do it alone – there are many resources and organisations that can help you with your financial challenges and goals. For example:
- You can use online calculators and tools to plan your budget, savings, retirement, or debt repayment. You can find some useful tools on websites like Money Advice Service, Citizens Advice, or StepChange.
- You can read blogs, books, podcasts, or magazines to learn more about personal finance and get tips and inspiration from other single mums. You can find some examples on websites like Just Us Two, Single Mum Speaks, or The Money Edit.
- You can join online forums, groups, or communities to connect with other single mums and share your experiences, questions, or advice. You can find some examples on websites like Netmums, Gingerbread, or Mumsnet.
Saving money and budgeting as a single mum may not be easy, but it is possible and rewarding. By following these 9 smart and simple steps, you can improve your financial situation and secure a better future for yourself and your family.
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If you enjoyed this article, you might also enjoy Help for Single Mothers UK – Charities, Finances, Legal & More – Just-Us-Two.com
Sources:
- Netmums. (2023). Benefits and financial support for single parents in 2023. Retrieved from https://www.netmums.com/life/single-parent-benefits
- Money Dashboard. (2023). How to budget as a single mum. Retrieved from https://www.moneydashboard.com/blog/how-to-budget-as-a-single-mum
- Uswitch. (2023). Compare the best children’s savings accounts. Retrieved from https://www.uswitch.com/savings/best-childrens-savings-accounts/
- Money To The Masses. (2023). Best savings accounts in the UK – April 2023. Retrieved from https://moneytothemasses.com/saving-for-your-future/savings-best-buy-tables/what-is-the-best-savings-account
- Just Us Two. (n.d.). Home page. Retrieved from https://www.just-us-two.com/
- Single Mum Speaks. (n.d.). Home page. Retrieved from https://singlemumspeaks.com/
- The Money Edit. (n.d.). Home page. Retrieved from https://www.themoneyedit.com/