This is a guest post by April McCaffery, first published in 2015.
My journey as a single mom began 12 years ago when I left my husband in Rochester, NY and moved back in with my parents and two daughters, then nearly 3 and 6. I had a couple of hundred dollars cash, no bank account, no car and no job when we returned to Los Angeles. But this is home – and where we could live rent-free while I got back on my feet.
It took nearly 10 years to go from surviving to thriving, particularly when it came to finances. It was important to me to have our own place, and our first apartment in L.A. was a one-bedroom. I slept on a futon in the living room and the girls got the bedroom.
My financial breaking point came about three years ago, when the car needed work that cost over $1,000. I’d just paid off my high-interest credit card a few weeks prior, and it was painful to have to put some of it right back on that credit card, but I didn’t see any other choice.
Fast-forward to today, and I am credit card debt free. In less than two years, I paid off over $8,000 in credit card debt. I have emergency funds, a credit score of 804, and I live on last month’s income.
The first two steps of my financial plan are the hardest, but make all the difference:
- Stop incurring new debt.
- Build your emergency savings.
- Values Summit.
- Track your spending.
- Refine Your Budget.
- Live on last month’s income.
The greatest lesson I’ve learned in budgeting is that there is no such thing as a normal month. This time of year, the oddity is buying school supplies – and once that dust has settled, it’ll be the holidays. Of course, there are the school fundraisers, school project supplies, birthday parties, insurance premiums, car maintenance, and other “unexpected” expenses that pop up at various times of the year. Your monthly budget has to reflect all of those, not just the monthly bills.
The best budgeting tool I’ve found that understands this is You Need a Budget. While that link will get you a discount (and a referral fee for me), if it’s not affordable right now, use a 3 x 5 notebook to track your expenses.
The Values Summit is your opportunity to decide what’s most important to you and your family. Clear out the noise of the billboards, commercials and online recommendations to figure out where you want your money to go. (There’s no right or wrong answer, as long as it’s right for you.)
The Values Summit will help you when it comes to refining your budget and finding the expenses you can decrease or delete altogether. For example, I finally decided it was worth the trouble to take my lunch to work every day, saving me nearly $2,000 annually. The girls and I also decided to ditch cable.
Again, no right or wrong answers here, but you may find that some changes don’t necessarily equal “sacrifice” if you are saving money towards goals that are important to you.
Finally, while not vital, it is pretty cool to live off of last month’s income instead of paycheck to paycheck, but it can become vital in emergency situations. For example, I once forgot to enter my time for a week so ‘missed’ out on a paycheck until I realized it. Had I still been living paycheck to paycheck, groceries would’ve had to go on a credit card (and not just for the points).
I’ve written an eBook, Balancing the Single Mom Budget, which is now available at Amazon for $4.49 (or, if you’re a Prime member, you can borrow it for free). Being a single parent is hard enough. Here in L.A., the sunshine helps…but not if you’re stuck in a car with a broken a/c! I hope to help single parents (and anyone, really) pay for those repairs in cash and guilt-free!
April McCaffery is the single mother of two daughters (now nearly 15 and 18), a paralegal, blogger at It’s All About Balance and author of Balancing the Single Mom Budget. She resides in Los Angeles, mere blocks from Highland Park.
