In most cases, when we have children, we do not plan on raising them as single parents. But sometimes dreams and plans for a family change or get derailed as we navigate life, and wind up raising children on our own.
For years, the U.S. Department of Agriculture published an annual report that calculated the cost of raising a child to adulthood, not including college expenses. When the last report was published in 2017, the cost of raising a child born in 2015 was $233,610. According to the U.S. Bureau of Labor Statistics CPI Inflation Calculator, $233,610 in January 2015 has the same buying power as $299,045 in January 2023.
That means we can expect the cost of raising one child to adulthood to be roughly $300,000, not including the additional cost of college. This is a staggering number, especially if you’re responsible for it all on your own.
Understanding and managing your finances while setting realistic goals can help reduce financial anxiety. How can you manage your finances as a single parent so that you do not feel overwhelmed or helpless?
Budget
First, you need to take control of your finances by analyzing and tracking your monthly cash flow.
Budgeting will help you prioritize your spending, earmark money to save for the future, and plan for your short- and long-term goals.
Are you living within your means or spending more each month than your income allows? The goal of a budget is to ensure you are meeting your basic needs — and some wants — without spending more money than you receive as income.
Manage credit and debt
Credit is borrowing money to buy goods and services with the promise that you’ll pay the money back by a specific date.
Credit cards are easy to access and, if responsibly managed, will help to establish you as a good borrower. When you apply for a credit card, it is especially important to understand the terms. Often, the fees and interest rates are not obvious when you are signing the application. The annual interest rate on…
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