Parenting isn’t an easy task, especially if you are a single parent. You have to consider many things to ensure a secure future for your child. So if you are a single parent, in this article, we will discuss how you can prepare a budget for your family and secure a good future.
In 2021, 40% of marriages in Canada ended in divorce, with money being the top reason for divorces, followed by cheating and other stuff. We understand divorce can be difficult to deal with and often can lead to serious traumas and makes life difficult. As a single parent, you often need to deal with a plethora of emotions, yet you have to take care of your child and tell them everything will be okay!
Often at the starting, it may feel like a mountain of responsibilities on your shoulder. Still, for the sake of your child, you have to keep up with all the responsibilities and make sure you provide them with all the necessary things essential for their well-being. Moreover, you also need to take care of your health. Of course, as parents, you are self-sacrificing, but you also need to be in a healthy condition to take care of your child.
We may not be able to help with other factors in your life but can surely assist you plan a budget that will help you secure your family’s future.
Step-by-step process to create a budget
Analyze your financial position
Before starting with any budgeting, analyze your current financial standings. Understanding your current income and expenses is important to create a budget. You can write all your expenses in one place and income opposite to it and check the money flow.
In accountancy, a balance sheet is often used to display assets and liabilities together, which gives companies a brief, clear idea of their finance. Below is a standard format of the balance sheet you can use to list all your incomes and expenditure.
- S.no Income/Investments Amount Expense Amount
01 XXX XXX XXX XXX
Total XXX XXX
This will help you analyze your income and spending and give you a clear idea of your current financial standings. The income side of the sheet consists of all the information related to your income and investments, such as salary, mutual fund, emergency fund, or miscellaneous income. At the same time, the expense column will contain your mortgages, groceries, bills, and other forms of payments.
Once you are clear on your total income and where your money is going, proceed to the next step.
Strikeout unnecessary spendings
After analyzing the above chart, look for expenses that you can strike out. For example, drinking coffee at home rather than in a fancy outlet, ordering from a restaurant, buying new clothes every month, and many more. Strike them out and use that money for other necessary purposes.
Have emergency savings
Let’s just admit; a smooth life is never guaranteed. You may face any difficulty anytime in your life without any warning. We can neither avoid it and certainly can never predict it, but we can surely prepare for it. Therefore, you must put part of your income as emergency funds. It will help you deal with emergencies effectively.
In these times, loans from online lenders are also a great choice as they offer
no credit check e-transfer loans, which makes them easy to get approved for.
Invest a portion of your income for future
Saying you may face an emergency is still hypothetical. It may happen anytime, but you and your children have a long life. Eventually, they will grow and get into universities or go abroad for higher studies. These things require a huge chunk of money.
Therefore, you must plan, not just for now but also for 10 or 20 years ahead. Invest a part of your income in mutual funds, NFTs, stock or similar financial instruments (make sure you learn about them before investing). Then, grow your money to meet the demands of the future.
Additional tips for Budgeting
- Increase sources of income
This one’s obvious! You must do all you can to increase your income sources. There are thousands of ways people make money. Find a few to invest your time in and expand it to generate extra income. For example, rent out your garage, buy machinery, rent them out, or have an online business.
Insurance is a must for your and your family’s security. As we discussed earlier, life is unpredictable, so insurances act as an emergency deposit for you in case something happens. There are many types of insurance available that you can apply for, such as term life insurance and health insurance.
Understand this with an example, a parent took an education loan for their children to study but met with an accident and couldn’t make the loan payments. The burden to pay the loan will be shifted on the children’s shoulders.
But if the parent has opted for life insurance, the loan amount can be easily paid back with it. This removes the burden of paying a loan from the child. This is why getting insurance acts as a protective shield against emergencies.
There are many tax benefits you can opt for as a single parent. This will help you save some on the tax that you pay to the government.
- While paying taxes instead of “Single,” file as “Head of Household.” You may be able to earn a higher standard deduction if you meet the criteria.
- You can claim child benefits for each child.
- You can claim the unused tuition fee if your child is in post-secondary school.
- The goods and services tax/harmonized sales tax (GST/HST) credit is a tax-free payment that helps low- and moderate-income families balance all or part of their GST or HST payments.
Lastly, you may have taken care of everything. Still, some things can go the other way. Therefore, to cover the minute expenses, you can take a no credit check e transfer loans to pay these bills.
Other than that, credit cards are also a great way to earn extra rewards to get discounted payment options or use the credit points to get an item for free. But if you have a poor credit score, you can get no credit check
e transfer loans in Canada from online loan lenders.
Bottom line
Creating a budget is no problem, but following it and sticking to it is the real challenge. However, you can suit and allot the budget as per your needs. Hopefully, this article has given you an idea of how you can plan a budget as a single parent.
Step-by-step process to create a budget
Analyze your financial position
Before starting with any budgeting, analyze your current financial standings. Understanding your current income and expenses is important to create a budget. You can write all your expenses in one place and income opposite to it and check the money flow.
In accountancy, a balance sheet is often used to display assets and liabilities together, which gives companies a brief, clear idea of their finance. Below is a standard format of the balance sheet you can use to list all your incomes and expenditure.
Additional tips for Budgeting