Managing Financial Challenges for Single Parents

Single parents may have a different financial plan than those who are married or live with a domestic partner. While you may face many changes, you can still thrive and develop ways to manage your money.

There are resources and assistance programs available for single parents struggling to navigate child support, car insurance, emergency funds, home loan and debt, to name a few financial adjustments. You are not alone.

COVID-19 has upended life for people around the world. According to the Pew Research Center, single parents are more likely to live in poverty than parents who are together, and women are more likely than men to be parenting solo.

Single mothers, who don’t have the option to trade child care and work duties with a partner and are more likely to work low-wage jobs, are at the greatest disadvantage, according to the Brookings Institution. Low-wage jobs in the retail and hospitality industries can’t accommodate work-from-home arrangements, so when school isn’t in session, single parents can’t work.

The Brookings Institution also notes that 17% of working women (more than 10 million) and 12% of working men rely on the school and child care systems to watch their children while they are at work.

Parents who can work remotely also need to figure out how to balance conducting full-time work and manage their children’s schoolwork. For children in school districts that have moved to a partial or full distance-learning model, this can range from starting a child’s Zoom meetings to conducting multiple daily assignments, overseeing work production and documenting evidence of work to submit to the child’s teacher.

The most pressing challenge single parents face is creating and sticking to a budget. Saving for retirement and your child’s education are great things to do, but they may not be possible for people living paycheck-to-paycheck.

According to the Brookings Institution, “63% are in their prime working years (ages 25-54), and 57% work full-time year-round, indicating the position is not a side activity.” In addition, 41% of single parents live in households that are 200% below the federal poverty level.

Single parents also face challenges with debt and improving their credit scores, finding affordable child care and securing the appropriate auto insurance policies.

Building a budget as a single parent presents more challenges than partnered parents because they don’t have another person to share expenses. Track your spending for a few months to build a budget, considering your fixed expenses (such as rent or mortgage and insurance) and variable expenses (such as utilities, gas and groceries).

After building your budget and accounting for your basic expenditures, the next thing to do is to set up a plan to pay off any debts. You’ll want to pay off loans or credit cards that have the highest interest rates because you’ll save the most money that way.

Experian analyzed consumer debt from 2009 to 2019 and found that “average student loan balances saw the largest increase in the past decade — growing more than $15,000, or 73%. Auto debt experienced the second-largest growth, and retail credit card debt followed with the third-highest increase.”

Searching for affordable child care can be difficult if single-parent families are relying on one income. According to Child Care Aware of America, 36% of a single parent’s income is spent on child care, but it can vary depending on the number of children and where you live. The national average cost of child care is between $9,100 to $9,600 a year for one child.

Buying a home can be a great investment for single parents if they live in an area where renting is more expensive than buying and if they have the money for a down payment and closing costs.

Jason Hidalgo, a USA Today Network reporter who covers real estate, said as a general rule, you don’t want to spend more than 30% of your gross income on housing. Unfortunately, it can mean homeownership is out of reach for many people due to record median home prices and record rents.

“In a normal market, the cost of buying a home typically starts to break even with the cost of renting an apartment by the fourth or fifth year, and everything from that point onward basically builds wealth (barring a real estate crash),” Hidalgo said. “There’s a reason why homes are typically the largest source of wealth for U.S. households. You’re essentially paying yourself as opposed to an apartment owner.”

The first thing to figure out is how much house you can afford based on your income and debts. A mortgage lender will consider your debt-to-income (DTI) ratio to determine how much you qualify for, which will determine your house budget. Your debt-to-income ratio is especially important as a single person since you’ll be the only person paying for the expenses. Ultimately, this means you’ll probably qualify for less money for a house than if you had a second income.

However, just because you qualify for a large amount does not mean you should buy a house at the top of your budget. Keep in mind that you should still have an emergency fund. Another thing to consider is whether you’re interested or have the ability to do your own home repairs. If not, renting might be your best bet.

Single parents who don’t have another partner to build an emergency fund in case of a disaster may need comprehensive insurance policies — home or renters, life, health and auto policies, which can protect you and your family when tragedies occur.

Getting in the habit of saving is difficult but important. You’ll want to “pay yourself first” and establish an emergency fund that covers three to six months of expenses in case of an emergency. American families, unfortunately, typically don’t have that much in savings.

“While the typical Black or Hispanic family has $2,000 or less in liquid savings, the typical White family has more than four times that amount. Other families fall somewhere in the middle, with the typical family holding $5,000 in liquid savings,” according to the Federal Reserve’s 2020 study “Disparities in Wealth by Race and Ethnicity in the 2019 Survey of Consumer Finances.”

Additional questions single parents may wonder about include food assistance, resources to help single parents attending college, what the child tax credit is, whether their kids can qualify for financial aid, whether they can adopt or foster kids and whether they qualify for housing assistance.

Single parents can access federal government support, such as Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP) for food stamps loaded onto an EBT card and HeadStart preschool programs. There are also advocacy organizations and community support groups to help single moms and dads navigate solo parenting.

• Child Care Access Means Parents in School Program: This is a federal program through the U.S. Department of Education to support or establish campus-based child care programs primarily serving the needs of students with low income who are enrolled in college.
• Federal Supplemental Educational Opportunity Grant (FSEOG): The FSEOG is for undergraduate students with exceptional financial need. First, fill out the FAFSA and then apply to receive between $100 and $4,000 per year.
• Head Start: Head Start is a federally-funded child care program for children up to age 5 and provides health and social services to the families of participants.
• Helping Hands for Single Moms: This organization helps economically disadvantaged single mothers pursue higher education by providing scholarships, emergency funds, assistance with holiday gifts for children, budget management and support group meetings.
• U.S. Department of Labor Scholarship Finder: Search for various scholarships with this handy tool, including scholarships for single parents.

• Afterschool Alliance: This advocacy group is working to raise awareness around the need for providing after-school care for all children. It has a cool tool that allows users to see budget impacts state-by-state for after-school programs to see if they’ve been affected.
• Single Parent Advocate: This is a nonprofit, faith-based organization that provides information and resources to single parents to help them raise thriving children.
• The Singletons: The Singletons is an Arizona nonprofit that provides help and resources to single parents who are facing a cancer diagnosis or have a child who has cancer. Parents can request services like meals or help with child care.

• Parents Without Partners: This organization is a nonprofit 401c(3) dedicated to supporting single parents without partners and their children. It’s a non-sectarian organization and has a Facebook group where parents can follow.
• Single Mothers Outreach: This organization is for single parents in the Santa Clarita Valley of California who have children aged 18 and younger. It provides case management, support groups and special programs like adopting families for the holidays.
• Single Parents Alliance of America: Make new friends and connections through this community that aims to provide support and resources for single parents.

• Low Income Home Energy Assistance Program (LIHEAP): The LIHEAP helps families with energy costs and weatherization.
• National School Lunch Program (NSLP): The NSLP provides free or low-cost school lunches to children in families with low income. It provides nutritionally balanced, low-cost or free lunches to children each school day.
• Supplemental Nutrition Assistance Program (SNAP): The SNAP issues electronic benefits that can be used by families and seniors with low income to purchase food (formerly food stamps). You can apply for SNAP online.
• Temporary Assistance for Needy Families (TANF): The TANF program helps families with low income. This program is formerly referred to as welfare, and the application process is lengthy.
• Women, Infants and Children (WIC): The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) serves women who are low income and are pregnant, postpartum and/or breastfeeding, as well as serves infants and children up to age 5 by providing nutritious foods.

• Fellowship Housing: This Illinois program provides housing to single mothers and their children, teaches them about financial management and helps them secure long-term housing upon graduation.
• U.S. Department of Housing & Urban Development: This resource locator pinpoints your location so you can find nearby affordable housing, the nearest HUD office or the local public housing authority.
• Warwick Dunn Charities: NFL veteran Warwick Dunn’s charity helps people with down payment assistance, home furnishings and home purchases. The charity has donated 173 homes to single parents through the organization, alongside Habitat for Humanity.

Laura Longero is a professional single mother and award-winning writer and editor who lives in Northern Nevada. She owns a condo and enjoys translating technical information to help others pave their way to financial freedom.