Single-parent families are becoming increasingly common in the United States. The younger generation, often Millennials (born between 1982 and 1996) and Gen Z (born between 1997 and 2012), tend to view traditional nuclear family structures as outdated.
Nowadays, many young parents are adopting or raising children on their own. Studies have found that in 2019, nearly one-quarter of children under 18 in the United States were living with a single parent. Compared to other developed countries, the U.S. has the highest proportion of children living in single-parent households.
Other statistics indicate that in 2023, around 15.09 million children were living with mothers, while approximately 3.05 million children were growing up in households led by single fathers.
All these studies suggest that more and more families in the U.S. are realizing that both single-parent families and families where parents take turns in raising children are on the rise. While many often cite divorce, separation, death, or out-of-wedlock births as the primary reasons for children being raised by a single parent, new research actually shows that young parents consider marriage and tradition not to be absolute.
Around 46% of Millennials and 44% of Gen X (born between 1965 and 1980) now express that marriage is becoming outdated; they aim to create a more inclusive family where children can grow up in households with either single or dual incomes.
Despite many young parents desiring to independently raise their children without relying on a partner, the financial impact of raising children is becoming increasingly challenging in the U.S.
New data reveals that about 32% of single mothers have annual incomes of $40,000 or more, while only 10% of single mothers have incomes surpassing $80,000.
Other studies from the Pew Research Center show that the poverty rate is higher for single mothers or solo mothers, with 30% living in poverty, compared to solo fathers at only 17%.
Approximately 16% of cohabiting couples are living in poverty, while a minority of married couples (8%) have incomes below the poverty line.
Recent analysis indicates that the poverty line for a family of four in the U.S. is $29,960, with individual annual incomes for singles potentially as low as $14,891.
In recent years, record-high inflation has led to a sharp rise in the cost of living, presenting the biggest challenge for single-parent families when facing high costs of essentials such as food, utilities, and housing. This does not even include additional expenses like childcare, school fees, transportation costs, and leaving enough money for an emergency fund.
Being a single-parent family itself is already costly and challenging, requiring juggling work and family responsibilities while dealing with escalating costs and economic uncertainties, which have had a deeper impact on the expenses of single-parent families in recent years.
Now, having a solid budget is more crucial than ever before, and for single parents, planning for their children’s future to secure their well-being has become increasingly challenging.
However, despite staggering costs, there are ways for single parents to budget and even have some cash left over each month for an emergency fund, social security, or savings.
One of the best ways for single parents to start budgeting is by understanding where your money goes each month. While you may have made some cutbacks and try to live frugally, without clear guidance or proof of where your money is going, tracking your expenses can be challenging.
Gather all your bills, bank statements, and pay stubs. By analyzing your income and keeping records of your expenses, you will have a better understanding of your earnings and where all your money is going.
Consider how your income compares to your expenditures. You also need to look into any debts you might owe and the amount you save each month.
By visualizing your financial situation, you will begin to see where you may be spending more than necessary, which areas to cut back on, and which areas, such as debts or savings, need more attention.
Once you have gathered all the information, you can plan a possible roadmap to help you better organize all financial matters in a way that makes sense to you.
The four main budget categories to consider include:
– Income
– Expenses
– Debt
– Savings
For every paycheck you receive, consider how much you have earned and where that money is going. By examining your expenses, you will have a better understanding of where your most significant expenditures lie.
Additionally, consider any debts you might carry. Paying off debts is one of the best and simplest ways to reduce unnecessary expenses, allowing you to redirect more cash towards other areas.
However, it’s essential not to be too idealistic, as you do not want to burden yourself or make too many lifestyle changes that could result in you or your children living a more uncomfortable life.
As a rule of thumb, one of the best ways to alleviate debt burdens is to pay off small accounts or high-interest debts as quickly as possible.
Dusty McMullin, Vice President of Operations at Sibu Sea Berry Therapy, a professional supplements and functional food company, shared, “One of the best debt rules my father taught my brothers and me was to pay off any small debts first.”
Dusty and his brother Peter are second-generation entrepreneurs and are now managing partners of the business their father, Bruce McMullin, founded in 2004.
Any small debt, whether it’s $100 or $1,000, can quickly become a heavy financial burden for your family each month. Creating a debt repayment plan will ensure that you can gradually start easing the burden, either by making small monthly payments or by fully paying off the debt in a lump sum.
However, before doing so, make sure you have enough cash reserves to help you get through the month or cover other expenses. While repaying all debts is crucial, sacrificing your family to do so may harm your financial well-being.
On the topic of debt repayment, another simple way to begin balancing your family’s books is by following the straightforward formula many use to budget their monthly expenses, including debt and savings.
Following the 50/30/20 rule allows you to allocate enough income to your household expenses (50%) and necessities, including debt (30%), with the remaining 20% set aside for saving.
By subtracting your expenses from your income, if you have cash left over, you are in the green. Any leftover cash needs to be divided into necessities (services and goods you can purchase) and debt repayments.
Any remaining cash can be placed into a high-yield savings account separate from your checking account, ensuring you do not unintentionally or intentionally spend this money.
“Saving for a rainy day, especially when starting out, is one of the best financial decisions anyone can make,” Dusty shared. “Having money you can depend on is crucial. While savings can be more challenging nowadays as the high costs continue to erode consumers’ disposable income, every dollar put into a savings account can accumulate into something larger in the long run.”
A dedicated high-yield savings account means you can place any leftover cash into this account and let it grow. Using this account as a safety net can motivate you to save for something that will provide substantial returns when needed the most.
While some things are more important than others, using your money more practically will allow you to make the most of every dollar.
Buying in bulk or shopping monthly at wholesale grocery stores can help you save more and stock up on essentials that can last longer. Comparison shopping is another way to ensure you get the best price for any items you may need.
You can opt for store brands instead of more premium products. Buy things that have a longer shelf life in your fridge or freezer or plan your meals weekly, noting how much you can spend on groceries and other items.
Making additional cuts, such as cancelling expensive subscriptions, opting for budget-friendly options like streaming services, or sharing costs with friends or family, can also help.
For more significant purchases like household items, search for better deals online or even consider finding them at second-hand markets. You can always purchase furniture at local thrift stores or nearby hospice shops.
As a single parent, you already have many things to deal with in your daily life, and adding extra financial pressure may be the last thing you want to think about when going to bed at night.
Dusty remarked, “In our business, issues can arise at any time, and while we always need to plan for those moments, we encourage our team members to focus on the obstacles they can control, then address additional problems when they arise.”
This philosophy often applies in our own lives as well. By focusing on the financial pain points we can currently control, like having too much debt or running out of cash monthly due to expenses exceeding income, we can actively take steps to slightly improve them.
Remember, everything takes time. Making small cutbacks regularly will pay off in the long run.
While discussing money with children is a topic that often sparks heated debates between parents and caregivers, it is crucial to talk to children about money, especially at an age where they are most impressionable.
As a parent, you can decide the best way to handle this situation, but taking time to teach children the value of money or how to handle income and expenses can help them better understand how to spend money once they start earning it themselves.
According to experts at the Child Mind Institute, discussing money with children, whether teaching them to set budgets or showing them your family expenses, can instill financial responsibility in them.
Moreover, it is suggested that starting to teach children from a very young age can help them make better financial decisions, guiding them on when to set limits and reduce impulse purchases.
Regardless of your parenting style or skills, consider finding a viable solution to share financial knowledge with your children. Make it engaging for them to better understand, or find ways to incorporate smart spending when you go out for monthly grocery shopping.
When possible, find a feasible solution to share your family expenses with your partner, friends, or family. While the topic of money can often feel like a sensitive subject, confronting the issue can help clarify the atmosphere, especially when it involves your partner.
Try to find a way where you and your partner can split certain costs, such as childcare fees or other child-related expenses. If you are a single parent without other dependents, negotiate with family members or friends to see if they are willing to share living expenses with you, like rent and utility bills.
Reaching out to a family member might be another option. If possible, see if they can rent out a room or two to assist you, or even share other costs like subscription fees or internet bills.
While talking to others about money is not always easy, informing them that you need help may make them aware of your needs while you get back on your feet.
In today’s economic environment, being a single-parent family may be one of the most challenging roles, and for those who must shoulder these struggles alone, things will only get tougher.
As the primary breadwinner for your family, you must ensure complete control over every dollar you earn and spend. As a parent, you want to ensure you can provide a living for your children and help secure a bright future for them.
Approach your financial situation with an open mind and make necessary cutbacks when needed. Rely on your intuition to make tough decisions and focus on what you can control right now.
While these may be challenging times in your parenting life, taking small steps forward each day will start to make a significant difference in your family’s long-term financial well-being.