Author: Lech John
Having children is an expensive endeavor. The cost of raising children is at an all-time high when you consider education, housing, healthcare, and food.
According to the United States Department of Agriculture (USDA), raising a child from birth to 18 costs about $250,000, which is a lot of money for a single-income family.
Single parents face numerous challenges, particularly when it comes to finances. Furthermore, according to the findings of a study conducted by the Center for Nutrition Policy and Promotion, they are frequently low-income.
If you’re a single parent on a tight budget looking to save money, here are five ideas to consider.
1. Automate Your Finances
Life as a single parent can be highly demanding. You may be unable to keep up with your bills or have the time to deposit money into a savings account manually.
Automating your finances can help you keep track of your finances, save money, and pay bills more easily. It will also assist you in sticking to your budget and financial goals.
You can have the following bills automated:
- Mortgage payments
- Credit card bills
- Payments for car insurance
- Utility bills
You could avoid making late payments through automation, which can result in fees and harm your credit score. Here’s how to automate your finances:
- Set up the appropriate accounts for your automated system.
- Pay yourself first by directing a portion of your paycheck to a retirement savings account or an emergency fund.
- Set up payments for your bills and expenses.
Also, review your bank statements and account regularly to stay on top of your transactions.
2. Cut Down Groceries Expenses
According to a survey conducted by the Bureau of Labor Statistics (BLS), single-parent households spent more money on food than other households. With single parents spending about 15% of their total income on food, finding ways to save money on groceries is critical.
To begin, you could shop at a more affordable store in your neighborhood. Consider purchasing store brands and using cash-back apps such as Rakuten, Ibotta, Fluz, and Fetch Rewards.
3. Use The Tax Season to Your Advantage
Tax season is quickly approaching, and single parents can take advantage of it.
To begin, you may be eligible for head of household status, which may allow you to save money.
In addition, filing as head of household entitles you to a larger deduction of up to $19,500 for the 2022 tax year. The deduction will be increased to around $20,500 in 2023.
To qualify for this status, you must contribute at least 50% of total household expenses for yourself and a dependent during the tax year and be unmarried.
Furthermore, tax credits can be more beneficial than deductions. A tax credit is a sum of money deducted from the taxes you owe the IRS, which can save you money that you can put towards other things. You can use the child tax credit as a single parent to save up to $2,000 for each qualifying child.
To be eligible for this credit, your child must:
- They must be under the age of seventeen.
- They must have spent more than half of the year with you.
- They must be US citizens with a social security number.
- Within a year, they must receive more than half of their funding from you.
Furthermore, single parents must have an income of $200,000 or less to qualify for the child tax credit.
When these credits and deductions are combined, tax season can be highly beneficial and help you increase your savings.
4. Remove Nonessential Spending
As a single parent on a limited budget, you must make every effort to reduce unnecessary spending. You can save money by canceling your cable subscription and replacing it with a cheaper streaming service such as Disney+, Hulu, or Netflix. These services can benefit both you and your children.
You could also cancel your expensive gym membership and work out at home instead. Alternatively, if you don’t use your landline phone frequently, cancel it or switch to a prepaid cellphone plan.
5. Get Discounts via Amazon Subscribe and Save
As a single parent, Amazon Subscribe and Save can help you save money on everyday purchases.
You can also save up to 15% if you sign up for automatic deliveries, which is useful for busy single parents.
Furthermore, you can get an extra 15% off your entire purchase if you add at least five products to your subscription to the same address. You can include the following items:
- Pet products
- Groceries
- Home Essentials
- Cosmetics
- Toiletries
You do not have to pay to set up a subscription; you can cancel or edit it anytime. Also, before signing up, determine the best delivery schedule.
The Bottom Line
As a single parent, you are responsible for your child’s care. But that doesn’t mean you shouldn’t save along the journey. You can automate your finances to avoid the stress of manually paying bills, take advantage of tax season, and eliminate all unnecessary spending, among other things.