Being a single parent is challenging, and the financial pressures can be particularly tough. On average, men usually earn more than women, but since most children reside with their mothers (83%), single mothers often face the combined burden of lower income and higher expenses. Whether you’re a single mother or father, managing your finances effectively is crucial. Here are some practical strategies to help turn your financial situation around, starting with a comprehensive budget.
The Importance of Budgeting
A detailed budget is your first step towards financial stability. List all your income sources, expenses, and debts. The more accurate and comprehensive your budget, the better you’ll manage your finances. Here’s how you can begin:
- Identify Needs vs Wants: Scrutinise each expense and distinguish between essentials and luxuries. Prioritise your spending to cover necessities like housing, food and childcare before anything else.
- Minimise Waste: Optimise your resources to avoid wastefulness. Get creative with meal planning to use leftovers, convert old clothing into cleaning rags, and explore second-hand options for items like school uniforms.
Smart Credit Card Use
Credit cards can be a tempting solution for immediate expenses, but the interest and potential debt can exacerbate financial strain. Use credit cards sparingly—reserve them for genuine emergencies.
Expanding Income Opportunities
Enhancing your earning potential is key. Consider the following:
- Return to Work: If you’re currently relying on government assistance, returning to work or finding a better-paying job can significantly improve your financial situation.
- Further Education: Investing in education such as tertiary study or online courses can open up higher-paying job opportunities. Though it may require short-term sacrifices, the long-term benefits are substantial.
Childcare Support
In Australia the Child Care Subsidy, introduced in 2018, offers means-tested government assistance to help cover childcare costs. Apply through Centrelink to see if you qualify based on your circumstances.
Leveraging Centrelink Benefits
Centrelink provides several benefits for single parents, which can alleviate financial pressures:
- Parenting Payment: This payment is available if you are the primary carer of a child. Eligibility criteria include being single with a child under 14 years old, or partnered with a child under 6 years old. View complete eligibility details.
- Family Tax Benefit Part A: Designed to assist parents who are raising children. It covers children from birth to 15 years, or up to 19 years if they are studying full-time and meet other eligibility requirements. View complete eligibility details.
- Health Care Card: Provides discounts on prescription medicines, medical services, and also offers concessions on public transport and other utilities. View complete eligibility details.
It’s crucial to understand and utilise all available benefits to maximise your financial support.
Make Sure You are Covered by Your Insurance
Now you can see the light at the end of the tunnel, make sure your insurance up to date. The last thing you want is to have to pay out for big-ticket items, like your car or your home. Also by keeping yourself insured, you and your income will be covered if there is an accident, injury or illness. If you are unable to work, your insurance provider will cover your projected income, meaning your family won’t go without. A cost-saving way of ensuring you are adequately covered for personal insurance could be through holding the insurance policies through your personal super fund.
Take your time with decisions, and get to know your financial position. If you are experiencing financial hardship or struggling with debt, our partners Revive Financial is here to help. Call them today on 1800 534 534.
For more information on budgeting and how it can help get your finances back on track, check out their budgeting page.
Of course, getting your tax situation sorted will also relieve a lot of stress and possibly get you a tax refund. Call Australia’s favourite national tax accountant – Accountants Direct on 1300 TAX SHOP (1300 829 746) or visit https://accountantsdirect.com.au/
