Financial Tips for Single Mothers
I have been a single mother most of my thirteen-year-old daughter’s life. I recently sat down with a reporter doing an article on single mothers. Here is what we discussed.
When did you become a single mother, and how?
I officially/legally became a single mother when my daughter was 18 months old. Mentally, it was much sooner. My former husband and I decided to divorce in my 8th month of pregnancy before my daughter was born. We stayed together another year as roommates and took turns being home with our daughter until we were able to sell our house.
How did you first react to this development and what has it been like?
I was shocked at the idea of becoming a single mother. That wasn’t what I signed up for when we decided to have a child. My daughter wasn’t even born yet, and I felt angry, scared, and overwhelmed at the proposition of being divorced, alone, and a first-time mother.
The first two years of my daughter’s life were a blur. Setting up and taking care of my own household, juggling work, and raising a small person took all my time and energy. I’m happy to say that I survived but I couldn’t have done it alone. I accepted a lot of support along the way.
Meeting other single moms helped a lot. I joined a meet up group called “Sisters in Arms” and we would get together regularly. The Moms in this group helped me through one of the most difficult times of my life. A few of these ladies became very good friends. I am so very grateful for this group.
What financial struggles are unique to single mothers? How might single mothers financially fall behind compared to households with two parents?
Women traditionally have taken a back seat to managing the finances in the household. I have seen it time and time again with my clients. As a result, they are often unaware of how to manage their solo finances, pay the bills, manage credit card spending, or save for their future.
Many single mothers prioritize short term expenses, maybe putting some aside for vacations or summer activities for the kids, but struggle to save for retirement and their own future. They are often behind on retirement savings and are looking at a modest retirement income, and possibly moving someplace cheaper once they stop working.
How can single mothers make sure they’re taking care of themselves too, financially? What are the smartest things for them to do?
Single moms need a spending plan so they can set themselves up for financial success. This combined with a cash flow tracking tool (like Mint, or even a simple spreadsheet) will keep them on track to reaching their financial goals.
It would be great if they paid themselves first out of each paycheck. Set aside a rainy-day fund for when those unexpected things come up. I also recommend they save a portion of their income for retirement.
Reach out for support from a financial coach or fee-only financial planner can also be helpful. Here are a few resources:
- Garrett Planning Network for help on a flat-fee or hourly basis.
- Accredited Financial Counselors (AFC) for financial coaching.
- Savvy Ladies – free financial education for women
- Check out MainStreet’s Money Library for helpful articles and videos.
- There are also a lot of cheap or free resources out there so don’t be afraid to do some research at your local library.
Why should single moms resist doing it all alone? How can they ask others for help? Whom might they ask?
There is a saying “It takes a village to raise a child”. All moms, single or not, need the help of family and friends, and they shouldn’t be embarrassed to ask for help when needed. I have met so many single mothers along the way and we have always provided support one way or another. Here are some areas where help could be appreciated by a single mother:
- Watching kids and/or pets
- Picking items up from the grocery store or Target
- Skill sharing. For example, as a financial planner I can help my friends with their finances, and they might be good at decorating or repairing things and could help me around the house.
- Making dinner/meal sharing. Get a few friends to make several batches of their favorite meal, then get together and swap. Cook once and eat different things throughout the week.
Any financial tips around accepting and spending child support?
Each state/county has specific guidelines for child support. There is usually an agreement, and or, court order, between the parents on what support payments will be given and what they should be used for.
In general, child support should be used to provide for the child’s basic needs:
- make sure your child has well-fitting clothing throughout the year,
- make rent or mortgage payments so the child has a safe place to live, and
- cover transportation expenses for the child, including car payments, fuel, bus fare, and any other costs associated with getting the child to and from home, school, family visits, and other places and activities.
Beyond basic needs, child support may be used to pay for other costs of raising a child, such as:
- school tuition, supplies, field trip fees,
- fees for extracurricular activities,
- health care, and
What insurance is especially important for single mothers
- Most parents should have life insurance to provide for their families in the event of an early death. This would generally cover paying for childcare, education, extracurricular activities, etc.
- Health, dental, and vision insurance are helpful to cover unexpected health related expenses.
- Disability insurance is usually provided by employment and covers income replacement should a person become disabled and not be able to work.
What kind of estate planning should single mothers do?
Every parent should have a current estate plan which includes:
- A Will – This describes who is the beneficiary of their assets, an executor who would wrap up their affairs, and most importantly, a guardian who would care for their child if they weren’t around. Children cannot inherit outright due to being minors so they should also name a guardian of their children’s inheritance, which is someone who will help manage these funds until they are 18. This could be a different person than the guardian of the child.
- Financial Power of Attorney – Who can handle financial affairs if they are not able due to an accident, etc.
- Health Care Power of Attorney or Health Care Directives are important to name someone who can make healthcare decisions if the parent is not able to.
- Some parents also set up a Revocable Living Trust for their finances. This legal entity may inherit of all the assets of a parent’s accounts and the successor trustee of the Trust would manage the assets until the child is of a certain age. This gives a lot of protection for the child’s assets but could be more expensive than naming a friend or family to be the guardian of the assets.
Being a single mother is hard work, but also rewarding. I know you can get through it too. Please feel free to reach out if you could use some extra financial support during this transition.