Single Parents and Money Issues

It’s a fact that single parents often overindulge our children for emotional reasons. Usually it’s because we (pick one):

• Feel guilty because our marriage to their other parent has ended

• Feel bad because their other parent has died

In either case, many of us instinctively want to “make it up to” our kids for what we feel they’re missing. But in addition to the risk of raising a self-centered child with an ingrained sense of entitlement, overspending on our children – meaning, spending more than we can actually afford – can be hazardous to our finances.

And there are already enough hazards in the pursuit of financial security for single parents.

Most of Us Are Female

The overwhelming majority of single parents, about 87%, are women. In general, women’s incomes are lower than men’s, so the average female single parent is at a financial disadvantage right from the start.

Delinquent Child Support

In fiscal year 2004, only about 59% of current child support payments due were, in fact, paid, according to a June 2005 report of the U.S. Department of Health and Human Services’ Office of Child Support Enforcement. (This is actually up from about 54% in 2000.)

Credit Cards and Loans

When cash is in short supply, many of us turn to credit or borrow from the bank to make up the difference. Unfortunately, excessive debt can lead to bankruptcy. Statistics show that:

• More women than men file for bankruptcy

• Single moms are 50% more likely to file for bankruptcy than married parents

• Single mothers are three times more likely to file for bankruptcy than childless couples

Inadequate Savings

We all know we’re supposed to put aside money for a “rainy day” – for those unexpected expenses like a new water heater or a transmission job. But this is easier said than done when money for even expected expenses is hard to come by. Yet without savings, unanticipated expenses can cause us to reach for the credit cards again.

Accepting Reality and Living within Our Means

Although we may want to be able to give our kids everything that kids with two parents have, we need to come to terms with the difficult reality that we probably can’t. If we’re unable to increase our income, then the only other option is to reduce our expenses.

Some of these ways might include:

• Finding a less expensive place to live

• Cutting down on takeout, delivery, “fast food”

• Shopping at sales, clearances, discount outlets

• Doing bulk shopping at warehouse-type stores

• Buying a used (instead of a new) car

• Turning down the heat a little or running the air conditioning less

• Examining our bills (e.g., land and cell phones, cable) and eliminating costly services that we don’t need

In general, by looking closely at non-essential expenses – things that we can reasonably control, like money spent on entertainment, vacations, and so on – we can usually find a number of areas in which to spend quite a bit less without too much “pain.”

Then some of that unspent money can be tucked away, little by little, into a savings account.

And when you’re wishing that you could buy your children those expensive sneakers or the newest video game system, think about this:

No one ever reminisces about their growing-up years by saying, “I had a wonderful childhood. My Mom/Dad gave me everything.” It’s the feelings of love we remember, not the “stuff” we had or didn’t have.