Finances for the single parent

Single, Expectant Mom

by Gary Foreman

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I am having a baby and I am single. There is no father coming to the plate and I am not getting any help from family. I am happy to be pregnant. I am 37 years old, and this is what I've always wanted. However, I did not plan for this financially. I always imagined I'd have a husband to go with the baby, but it didn't happen. I need ideas on how to raise a baby without spending so much money. I am selling the stuff out of my house to pay doctor bills and co-payments and such at the moment. I was thinking of getting a roommate, but that could be good or bad. I work full time, live in a small house with a mortgage and drive an old car that is paid off. I am frugal. But at this point, I need all the advice I can get.

Although Amy may feel alone, she has plenty of company. There are approximately 13 million single parents. And, while it would have been better to begin saving years ago, let's see what Amy can do now to stay afloat financially.

A budget is essential. It's essential not only to help control spending, but also to give her the security of knowing that all the month's bills can be paid. She'll find a good budget worksheet at

The first part of assembling a budget is for Amy to estimate her income. Her three main sources will be her pay, child support and any government or charitable aid.

Amy will want to maximize her earnings. That may mean going back to school or taking courses related to her work.

She indicates that she doesn't expect the father to step up. Amy might want to pursue legal means. Child support could add about $6,000 to her annual income.

Check out the variety of organizations created to help single parents. Her phone book can help her find the state information number. She can also find it by going to the U.S. information center and asking for the correct state information center.

Also investigate charitable and private organizations. Churches and the United Way will know what's available locally.

After estimating income, Amy needs to determine what her expenses will be after the baby is born.

According to the Consumer Expenditure Survey 83% of single parents will have an annual income of less than $43,200. Those parents will spend $131,730 raising a child to age 18. That includes housing, food, transportation, clothing, health care, childcare, education and miscellaneous. That works out to $7,318 per year.

There are regional differences however. The urban Midwest and rural areas are the cheapest for a single mom if Amy is interested in moving.

Housing and childcare are the biggest expenses and the ones most likely to bust her budget. Depending on where Amy lives and the type of care provided, daycare costs range from $5,000 to $18,000 a year. To get a realistic number, she'll need to call and visit some local daycare centers.

Housing is a relatively fixed expense. Once she's investigated refinancing her mortgage and shopped for cheaper insurance, other changes, while helpful, will have a smaller effect on expenses.

Amy pointed out one idea that could have a major impact on both her housing and childcare expenses. That's taking in a roommate. Obviously, selecting the right person is critical. But bringing in another mother with children could provide a number of significant benefits.

First, it would reduce her housing expense, perhaps by as much as one third.

Second, if Amy found someone who worked a different shift than she does, each one could be providing childcare while the other roommate worked. They might need some babysitting for a few "overlap" hours each day, but daycare expenses would largely be eliminated. A major plus in a single parent budget.

Once the bigger pieces of Amy's financial plan are set, it's time to look for the smaller areas of saving. A web search will turn up many sites that discuss various ways to save on baby items. She could save on everything from food and clothing to furniture.

Amy will need to look beyond her budget. Any extra money at the end of the month should be put into an emergency fund. Unanticipated expenses (aka "emergencies") are a big threat to the single mom. Often a credit card is used and then paying it off becomes a problem.

Many unexpected expenses really can be predicted. Most families will face auto or home repairs every year. We just don't know when they'll occur. So including some money for "emergencies" in your budget each month is a good idea.

And even though Amy's budget will be tight, she should still consider long-term disability insurance. About one in three adults will be disabled. As the only source of family income, that could be devastating. Start by finding out what's available through your employer.

One other thing will change for Amy. She'll need to be prepared in case she dies. That means having enough life insurance and a will.

She'll need between 6 and 10 times her annual salary in life insurance. That should provide food and shelter for her child.

A will is also necessary. A lawyer can create one affordably. Make sure that it includes your preference for a guardian should one be needed.

Amy has a challenging road ahead. Like most journeys, the better your planning and preparation, the easier the travel. Here's to a wonderful life for Amy and her child.

Updated February 2014

Gary Foreman

Gary Foreman is a former financial planner and purchasing manager who founded The Dollar website and newsletters in 1996. He's the author of How to Conquer Debt No Matter How Much You Have and he's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, and Gary shares his philosophy of money here. Gary is available for audio, video or print interviews. For more info see his media page.

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  • For more helpful information, go to /menu/topic-r.htm#Singleparents
  • Don't be overwhelmed! Make a list and start with the things you have. Then start working on the things you don't.

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