 You’re a single working parent and you’ve actually found time to read this article? Congratulations! Finding any spare time at all probably feels like a minor miracle.
Single working parents are loaded with special responsibilities and stresses. Being pressed for time and, often, money comes with the territory. So learning about and sticking to the best ways to manage your finances for yourself and your youngsters can be daunting. However, it’s your best option to save time, money, and maybe your sanity.
Here are tips specifically geared to help you take charge of your financial life (and help your children get off to a sound financial future, too).
Time is moneyThat old adage is especially for working single parents. "Time is tight and there is an overwhelming trend to save time by spending money. It doesn’t have to be this way, however," economist Tom Smith, a finance professor in the Goizueta School of Business at Emory University in Atlanta, tells Synergy.
"Once a month, sit down with your bills and create a spreadsheet. Identify your fixed versus variable expenses and then think of ways to save. Additionally, if you have a few extra bucks, you can think about ways to make the time with your kid more productive or enjoyable," Smith advises.
"If you typically spend a lot of money on take-out food, for example, think about taking a cooking class with your child – this serves as both entertainment and a way to trim your meal budget. This way, even if you’re spending time cooking you’re also getting a little more quality time with your kid."
 Tactics for tackling your budgetAccording to Smith, the most effective way of budgeting is to tackle your spending by tracking it over a two-to-three month period. "Because our lives are so crazy, taking a one-month view of spending can be incredibly inconsistent. Also, you might want to choose months that you know might be a little tight - choose a month with a birthday or celebration, for example. These events do occur and you should budget for them. Then you will be better off in the months where these expenses are lower," he tells Synergy.
If you’re a single working parent who has a limited income, should you place more emphasis on retirement, an emergency fund, or planning for college tuition? "It is very difficult to budget for everything, particularly in this economy. If you are faced with a very limited budget you have to make some choices and start establishing some goals," Smith explains.
First, establish an emergency fund and realize the days of considering your unused credit on credit cards as "emergency funds" could well be gone – because the current trend is for companies to revoke any unused portion of your credit. "So, if you have a $5,000 limit but are only using $2,000, the company may reduce your limit to $2,000. This is making it extremely difficult for people to have an emergency credit card," Smith says. "So, I am counseling people to establish an emergency fund with $1,000 to $2,000 as quickly as possible. If your brakes go out or if you need some plumbing done in your house, you don’t have too many choices about if you can put off a fix. As such, having $1,000 in an account is very wise."
After you’ve established an emergency fund, then focus on retirement and college. "I know that it’s hard to build wealth in the current economic environment and it might not seem important to put $100 into a college account now (especially if your kid is four years old), but both of these issues are critical for financial health," Smith states.
More money strategies for single working parents- Consider having money deposited directly from your paycheck into a state-sponsored Section 529 college savings plan. "These plans build wealth with very small tax consequences. You don’t pay tax on any interest or income earned in the plan and you only pay taxes on any portion of the plan that is not used for qualifying expenses," Smith explains. "If you have several children, you can pass the money from one child to another if the first child decides not to go to college or spends less than the amount you have saved. "
- One rule of thumb is to have insurance (including disability and life) in the range of six to ten times your annual family income. "First, find out what your job offers with respect to life insurance and disability," says Smith. "Most jobs, but not all, do not allow employees to bring their life insurance with them after they leave employment. So, you might want to consider supplemental insurance."
- Set up an estate plan. Think about what will happen to your assets if you were to become disabled or even die. "You should have a clear understanding of how your assets will transfer to your family and the best way to set up inheritance for your kids. You can get this information from an attorney or an estate planner," Smith states.
 Kids and money managementIf your children are old enough to understand your need to curb spending, should you bring them into your money management efforts? "Absolutely," answers Smith, who has delivered hundreds of workshops on financial fitness. "You should bring your kids up to speed on money management regardless of whether you are a single parent."
Need some help with the specifics? Smith points to these online resources aimed at youngsters. They are grade-level appropriate and teach all types of money management skills in a fun, yet accurate way:
Childcare expenses and credits
Of course you want the best childcare for your youngsters - relatives who can help with after school care and programs recommended by trusted co-workers and friends who also have kids are good bets. However what if you are new to an area or your childcare plans have fallen through?
A good resource for economical, but quality, childcare is the nonprofit initiative Child Care Aware http://www.childcareaware.org or call 1-800-424-2246), a program of the National Association of Child Care Resource & Referral Agencies (NACCRRA). Child Care Aware helps families learn more about the elements of high-quality child care and how to locate programs in their communities.
Even though you are busy, talk to your CPA or do your own Internet research to make sure you have not overlooked tax benefits related to childcare for working parents, too. Depending on your income, the IRS allows you to deduct a percentage of up to $3,000 in daycare bills for one child or $6,000 for two or more children. You can read more about the tax credit here (http://www.irs.gov/publications/p503/ar02.html).
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