There should be very little doubt that being a single dad is rewarding on many fronts. Not only do you have the opportunity to shape and mold your children with very little interference, but having the privilege to watch them grow into respectable adults is a great testament to all the hard work you put forth.
Much like caring for a plant, watering and nurturing them the right way is the ultimate reward.
That said, there are some uncertainties about being a single dad that leaves many men awake at night due to anxiety.
The elephant in the room that not many men want to discuss openly is their ability to remain both a father and a great provider.
It’s because of this and through letters I receive weekly asking me to address this conundrum.
9 financial tips for single dads that really matter is a response to the inquiries I have received so I hope you find this post valuable.
Inside I will be discussing the importance of:
- Find out exactly what you owe
- Set and stick to a realistic budget
- Set aside funds for short-term emergencies
- Reign in your debt
- Trim the fat
- Protect your kids future
- Set financial goals
- Schedule financial check-ins
- Create an additional income stream
Now that we have a better understanding of various financial tips for single dads that really matter, let’s take a closer look at each one of them and see if we can make sense of all this.
1. Find Out Exactly What You Owe:
As a father and also head of the family, it’s on you to ensure that your family is well-cared for and financially safe.
Subsequently, you need to be remarkably careful and involved when it comes to managing finances.
I would highly recommend that you invest in some sort of binder that you can employ to track and monitor your finances and a container of sorts for storing paid bills (if you pay electronically you can set up a folder in your email and save them under the category “paid bills”).
I recommend you take the time and go through all of your bills and immediately pay whatever is owing to the following week.
In the event, you cannot afford to pay a particular bill you need to notify the company and request an extension or set up some sort of realistic payment plan.
Trust me, they will be glad to hear you are attempting to save face considering most folks simply avoid paying anything.
Please make sure you create some sort of chart as well to track everything you owe versus everything you have paid down. This will also serve as an effective way to memory jog things, especially if you have bills you have completely forgotten.
2. Set And Stick To A Realistic Budget:
Second on the list and a critical part of the entire debt-ridden process is having the willpower and knowledge to stick to a budget.
And depending on how long you have been single, this may be a rather new concept as you transition from a dual income to a single one. And don’t think just because you are not the custodial parent the responsibility does not fall on your lap, after all you still have an obligation to your children to do the right thing.
Most of us are aware, even if we don’t practice what we preach, the fastest and most effective method to financially ruin oneself is to spend more than you make.
At the very least you should know how much you earn versus how much you spend. Setting these things on paper may shock most of you on how much all these little things like your daily trip to Starbucks costs, or if you have a constant addiction to using your overdraft, think again. Those pesky little overdraft fees can certainly add up.
If you’re really struggling to make sense of all this I recommend a decent budget app to get you started. Some people rave about the money they “notice” when they finally start tracking where all of it goes (money in versus money out)
If you’re new to all this try to not look at this as a form of punishment, rather, try and see it as a way to regulate spending so you can quickly get out of debt and begin living life with much more breathing room
In other words, examine where your money goes every month without exception.
Your net income’s top 3 categories should be approximate:
- Housing: 35%
- Food: 15%
- Auto: 15%
- Investments: 5%
Of course, nothing is set in stone, but this approximation is just that, an approximate amount that can be worked around with a bit of give and take.
Consider future expenses as well and find a way to reward yourself every so often. After all, life is also about living so get out and enjoy yourself on those rare occasions that you don’t have the kids
It’s a shame, but dads quite often do not receive the same attention as single moms, however, we are just as instrumental in raising our kids in the most positive way possible.
Set Money Aside For Short-Term Emergencies:
I knew money was tight for many folks, and single dads were no doubt a struggling cohort that needs recognition in these stressful times.
However, I was completely taken back when I heard that four in ten Americans can not meet an unanticipated $400 expense.
In fact, some experts have declared that 60% of all North Americans live one paycheck away from homelessness.
6 in 10 are one paycheck from losing their homes. Let that sink in for a moment!
If you’re serious about life and your kids are at the very top of your priority, you need to realize that an emergency can strike at any moment.
I remember when I was in my early 30’s I developed a nagging lower back problem that persisted for many years until I was able to get it under control.
During that time I spent thousands on chiropractic care, physiotherapy, and I lost money due to my inability to work a full-time job.
To avoid a similar situation I had, I recommend you start a fund for short-term emergencies.
One way to build an emergency fund is to start with setting aside a few hundred dollars per month. Pretty soon you will have built up 3 months living expenses, then before you know it you would have saved up to one full year of savings where all your rent, bills, and food is covered.
One question I always get is:
How do I put money aside if I’m really short on funds?
Naturally, you will have to get a little creative and potentially cut some things out of your life.
For example, while I was building up my short-term survival money I took public transit instead of a car. This saved me around $500 per month or around $5,000 per year.
You could also cut out cable and live-stream everything. That should save you around $100 per month.
Anyways, the bottom line is if you’re serious about this Is going to require some dedication and a little bit of creativity as well.
Reign In Your Debt The Right Way:
If you’re serious about financial freedom you will want to eliminate your debt level.
I firmly believe that your primary residence should be your only debt if you have any debt at all. Eliminate all student loans, car payments, and credit card bills as quickly as possible.
If this sounds like an impossible task at hand, take comfort that millions of other people were in similar situations, and with some hard work and strategic planning, there’s no reason why you can’t be victorious as well.
The two basic strategies for getting rid of debt are:
- Snowballing: the way that this works is that you start with the debt that has the least amount to be paid. Make a payment on that first then move on to the next smallest debt and so forth. The feedback I have received is that this method is the most motivating, and when you’re motivated it is more likely you will stick to the plan
- Avalanche: In contrast, this method involves that you would start with the debt that has the highest interest rate and not the total amount. Pay that off first, then proceed to the one with the next highest interest rate. Much like the snowball method, this particular strategy will most likely benefit you more if your ultimate goal is to save more money. Bear in mind that picking the right motivating method is key for long-term success in debt reduction.
If you want my opinion both methods work great so pick one strategy, stick with it and watch your debt disappear.
Trim The Fat:
This is perhaps my favorite way to tackle debt, and certainly, the minimalist mindset is guaranteed to yield perfect results.
Although hindsight is 20/20, there’s something to be said about living below your means and the reflection of your bank account.
I would say that 90% of all debt holders got that way because they wanted to keep up with the Joneses: they wanted that brand new car, they wanted the million-dollar home or the killer wardrobe that costs thousands.
I’m not saying nice things are bad, however, if you want a luxurious life but only earn 50k per year then in the long-run you are going to run into problems.
There’s nothing wrong with buying a decent used car if you can’t afford a brand new one, and there’s certainly nothing wrong with public transit while you save up for a car that you can ultimately afford.
Want that million-dollar home? Live frugally and put down a hefty downpayment so your mortgage payment is more affordable.
Ultimately, it’s all about making sacrifices and enjoying what little you may have at the moment. Don’t get caught up with what your neighbor, friend, or boss has. Focus on YOU and your life will be far less stressful and way more pleasurable as you learn to enjoy the little things in life.
Protect Your Kids Future:
As a single dad, you are most likely the breadwinner of your family, and as the primary provider, one of the smartest things you can do is make sure your children are provided for in the event that some type of tragedy occurs.
Single people do need life insurance, especially if they’ve got kids who depend on them financially.
There are various ways you can do this. For example, term life insurance can be affordable, and you can get a decent plan for Under $50 per month if you shop around.
The problem with term life insurance is that it’s what the name implies – it’s good for a term of around 20 – 30 years give or take, and once that term is up premiums increase with age and may become cost-prohibitive over time.
In fact, it might be better to go with a whole life policy in some instances.
Either way, a life insurance policy payout can help in a number of ways such as help cover the cost of daycare, University fees, living expenses that occur day-to-day, housing to name a few.
I’m no financial expert by any means, but I do know that having some type of insurance policy is a great way to safeguard your children and protect the ones that you love.
Bear in mind that minors cannot receive a life insurance payout specifically, so if your recipients are your kids you will need to also appoint a guardian.
Set Financial Goals:
If you made it here congratulations, by now you should have a greater comprehension of how to reduce your debt and the importance of creating a long-term budget.
The next step is to set out some very specific financial goals for yourself.
As a single dad ask yourself:
- Have you filed for child support, and if not why?
- Should you look for a higher-paying job?
- Are you willing to go back to school?
- Do you need to move into a rental or use public transportation to help reduce your overall monthly expenditures?
These are tough questions that demand tough answers and an even tougher plan of action.
Look at it this way, the ball is in your court and only you can and will determine what type of plan of action suits your needs. However, if you ignore your financial health then executing a solid plan will be very difficult to sustain, even for the short term.
The fact that you got this far into my post tells me that you are determined and willing to do what must be done for the sake of your mental state and the overall health of your family.
A large part of being a single dad single is learning how to roll with whatever comes your way, and by not giving up means you will become wiser moving forward.
Be resourceful, never quit, and do what must be done to give your kids the life that they deserve. You got this!
Your Weekly Financial Check-Ins:
In order to ensure that you’re on the right track, it is advised that you schedule a weekly financial check-in with yourself.
Don’t overlook this crucial step in maintaining your personal finances, and it’s one that you should continue with every week.
In your “meeting” these are the things you will want to pay attention to:
- Pay all bills that have been neglected and are overdue.
- Take the time to balance your checkbook through a spreadsheet or Google Docs.
- View the balances of your financial accounts.
- Update your debt list including all recent payments
- Finally, markdown and record all future bills that are anticipated.
Create An Additional Income Stream:
The fact that you’re committed to debt reduction and providing for a family – your family – is a wonderful goal and it’s something to be exceptionally proud of.
Whether you have one child or two that you care for it makes no real difference, the end goal is still the same. A happy, healthy family is all that matters.
That said, if you’re looking to go that extra mile you should consider adding an additional income stream to your financial portfolio in conjunction with these 9 financial tips for single dads.
I understand that your time and resources may be limited and less than ideal.
The good news is that you can take on an additional income project for as little as the price of a cup of coffee per day, and less than 10 hours per week time commitment.
and start creating wealth starting today!