A Mother's Approach to Savings

contributed by Beckie


Related Articles

Money-Saving for a Single Mom, Working Mom

Surviving as a Single Mom

Single Parent Finances

As a single mom of three, I've been told that I need two to three months of savings in the bank in case something would ever happen, such as layoff, injury, etc. The interest being paid at banks is generally only 2 to 3 percent at best. Rather than put the money into a money market or CD, I have paid three months ahead on my mortgage. By doing this, I am actually getting 7.75 percent interest and I know that I have a three month cushion in case something should happen. This is in addition to the money that I have put into my regular savings to cover such things as electric, phone, gas, and food if something should happen. Now with my emergency fund firmly established, I put everything extra on the principal of my loan.

I've had a few people say that I should just put the money straight towards the principal to save more money. But, if something should happen to me, I would still owe the next payment. This works wonderful for me. In order to get the first payment, I simply put any extra money that I could into savings (be it $20 or $100). When I had enough for the first extra payment, I took it from savings and sent it in. Then I started all over again. But this time I made sure that I had $200 to $300 left in my savings before I sent it so that I had a cushion for the everyday bills. Sometimes, it would take me three months to save the extra payment. At other times, it would take eight months. By keeping at it, I have paid ahead three months within three years. My $92,000 loan is down to $82,000 in just three years.

On the day of the closing, the bank gave me a couple of coupons for sending my payments in until I received the payment book. I noticed that the first payment wasn't due until the third month after closing. Since I had already saved the money, I made my first payment the same day as the closing and I made a payment the second month. I'm not sure if it's true, but I've been told that I cut six months off my loan by doing this. That's a savings of $3,600 in my case. I'm not sure how much interest all this has saved me, but I do know it's a considerable amount. I would love to know the exact amount. My best guess is that I will have my 30-year loan paid off in about 23 to 25 years if I continue doing as I am. This means a savings of $37,800 to $52,920! Not a bad chunk of change.

As a side note, I've been divorced 4 years. During the first year, my home had to stay in my ex-husband's name until someone would take a chance on me. I have now remodeled my family room. Also, I replaced a drafty sliding door with a window in my bedroom. This was accomplished by doing much of the labor myself. On my birthday and Christmas, I asked my family to give me such things as rolls of insulation, light switches and covers, buckets of plaster, plaster board, etc. instead of clothing and knick-knacks that I did not need. I watched for clearance items, such as a $90 ceiling on sale for $35 and a five-gallon bucket of paint on sale for $35. Yes, it took some time, but everything was paid for in cash. Each room cost me between $3,000 to $4,000 with the largest expense being carpet. As an added benefit, I have seen a drop in my energy bill due to the fact that I put insulation in the ceiling and walls and replaced a drafty door.


"My Story" is a regular feature of The Dollar Stretcher. If you have a story that could help save time or money, please send it to MyStory@stretcher.com

Take the Next Step

  • Are you getting the best CD rate? Use our simple tool to find out. It's completely private, extrememly simple and you'll know what rate is available to you in seconds!
  • Compare money market rates with our best rate finder. Don't let your bank pay you less than you deserve. It only takes a minute and your privacy is complete protected.
Stay Connected with TDS







Subscribe to TDS Newsletters

Join over 250,000 other subscribers!

Join Fido!

Discounted movie tickets
Sign up for Savvy Savings at TDS and get a free membership for discounted movie tickets!

Your Email:


Surviving Tough Times
Dollar Stretcher Parents
Dollar Stretcher Tips
The Dollar Stretcher (text-based)
Financial Independence
The Computer Lady
Computer Lady Lessons
Healthy Foods

Your Email:


View the TDS Privacy Policy.