It isn’t wrangling the kids; it isn’t dealing with an ex; it’s managing your money that is inarguably the most challenging task any single parent must endure. Pew Research found that single parents bring home dramatically less than their married counterparts; a married father earns a salary about $70,000, while a single dad’s income is on average around $40,000.
Raising kids on a single income is and always will be a strain on the budget, and too many single parents fall back on credit in order to make ends meet. If you are looking to keep your kids and your credit score happy and healthy, here are some single parent tricks and tips to keep you financially afloat.
1. Get your debt together
Most Americans have one form of debt, and many have multiple. Mortgages, student loans, credit cards, and more make monthly payments difficult to juggle, especially for single parents who have so many balls in the air. To stay on top of your bills and keep your credit score high, you may want to consider consolidating your debt into one easy payment.
Most banks are willing to provide personal loans with minimal interest that will cover the cost of your other debts. Then, you can make a single monthly payment to one entity instead of forgetting one of your multiple debts and damaging your precious credit.
2. Know your credit scores
Before you can take steps to maintain or improve your credit scores, you must know what they are. Learning your credit score is easier than ever due to the wealth of websites offering the service — but you should know that different sources are likely to give you different scores. This is because not every score provider uses the same information or model to generate your score. Even more confusing, different credit bureaus have completely different ranges for credit scores.
Most credit checks look into your FICO score, so this is the one you should uncover; however, for a comprehensive look at your credit, you can also investigate your Vantage, BEACON, NextGen, and EMPIRICA scores. If you don’t trust websites to accurately report your scores, you can always ask your bank or another reliable lender.
3. Use the right card for your lifestyle
Not all credit cards are created equal, but fortunately, there is a card that is appropriate for everyone. Single parents have lifestyles that differ from the norm, which means they must be particularly picky when it comes to applying for credit cards. You may want to do some online research to find the right card for you — there are a handful of excellent credit card comparison sites, like CompareCards — but generally, here are the best types of credit card for single parents:
· Low Interest Rate. Having a low-interest card means you don’t have to sweat too much if you can’t pay a bill in full at the end of the month.
· Bad Credit. Some lenders craft cards specifically for people with bad credit; these come with a handful of potentially dangerous features, like variable interest and low credit lines, but they will help you improve your score over time.
· Rewards. Plenty of credit cards offer savings on everyday essentials, like gas and groceries, in exchange for higher interest rates and fees.
4. Keep a tight budget
You may have a vague budget in your imagination, but if you want any hope for your credit score, you must commit your budget to indelible ink. Making concrete budgets doesn’t come easily to everyone, and it is likely that you’ll need to do some research before you have a workable budget.
Sort through your expenses for the past through months and organize them into different categories: food, entertainment, school, travel, etc. Then, you should be able to see where you can afford to scrimp and save. Your budget should be economical but also realistic — you probably can’t afford to feed you and your kids healthily on just $100 per month.
5. Choose your charges wisely
If you can comfortably pay all of your expenses each month, then you probably don’t need to worry about what you charge on your credit card. However, if you expect to pay less than the balance, you may want to limit your credit usage. A smart solution is selecting a single expense to charge — say, gasoline — so you can build up your credit without hurting it.
6. Watch your accounts closely
It never hurts to be diligent. Credit card companies make mistakes, and identity theft is becoming rampant. You should organize the receipts for purchases you make with your credit cards and sort through them when you receive your month’s-end statement. If you notice any mismatched charges, you should alert your lender immediately; there is no reason to pay for expenses that aren’t yours.