When you’re a single mum budgeting is hard, juggling money is painful, and constantly denying yourself life’s little pleasures can really grind you down. There has to be a better (or at least less stressful) way. The only real way of keeping on top of finances is to control the budget, but there are ways to make it interesting, dig out information about your spending that you may be overlooking, and find ways to afford some of the finer things. If you are a single mum this post is incredibly helpful for you.
Devise a Plan – first step.
If you’ve never attempted any accounting before it can seem overwhelming, so keep it simple. Get yourself a notebook, dig out your bank statements (or go online if you do Internet banking) and run through your latest couple of statements. Write down all your regular expenses, from rent or mortgage to insurance payments and magazine subscriptions. Include everything that goes out of your bank account via direct debit or standing order. While you’re doing this, watch for payments you don’t need anymore. It’s easy to carry on paying small insurance amounts for products you no longer have, for instance. Alternatively, maybe you have a gym membership but never get to the gym anymore? Trips to the gym are difficult when you’re a single mum, so don’t feel bad for not going! Just make sure you aren’t paying for it. If you find something you’re paying for and not using, cancel it.
Expand Your Plan – second step
Now you know your regular outgoing, start a new page in the notebook (or open a new worksheet in Excel or however you’re making your notes) and create four columns on the page. These four columns will form your monthly bookkeeping records. Head them by date, item purchased, cost, and bank balance. Every time you spend money, make a note in the relevant columns, deducting the amount from the balance in your bank account. Remember to deduct all the automatic expenses you figured out in step one to keep everything reconciled. Saving receipts can help with this step as you may not always have a notebook to hand when you’re out, or not want to stop and write things down. Go through the receipts when you get home and transfer all the information, then you can throw the paper away.
How to Use Your Figures
After doing this exercise for a couple of months, you’ll have a really deep insight into how you use money and see where you spend the most and where it might be possible to trim costs. You can dig into any category of spending you want by highlighting every corresponding entry. Are you spending out too much on eating out each month? How much on school expenses or kids’ activities? How much on petrol or taxi fares? It’s a powerful (and empowering) exercise.
Ways to Make Money Go Further
While you can’t magically turn a limited budget into a limitless one, there are ways to redirect finances so it works more in your favour, and little changes in spending all add up.
- Can you trim the grocery bill? Make meal plans and do a weekly shop instead of constantly topping up through the week. Maybe choose a few generic products instead of branded ones (without depriving yourself of favourites), or try shopping in a budget supermarket if you normally use the big names.
- Consider your lifestyle and whether you’re paying for things you don’t fully use. TV subscriptions, for instance. You may be paying for 600 channels you never watch. Or have an expensive mobile phone contract when PAYG would give you the same features for a lot less.
- Could you earn a bit more? Are you claiming all the benefits or tax credits you’re entitled to? Would it be possible to work a few hours extra, or get a second job? It’s not for everyone, as you need to factor in childcare if your kids are small, but worth considering if you could arrange some babysitting help.
Self-Employment and Bookkeeping
If you choose to go self-employed and work from home to make some extra money, keeping financial records becomes a legal requirement rather than a personal way of tracking your money. The simple bookkeeping system outlined above will get you started since the basic principle is the same as far as balancing income and outgoings goes. It’s important, though, to have a separate system for business spending and income. A professional bookkeeper could help you set up a simple business system, and when you reach the end of the year and need to submit your tax return, you’ll need those records either to do it yourself or to hand over to an accountant who’ll make sure you’re claiming your allowances and not paying too much tax. Having sole responsibility for family finances and childcare is tough. And so is sitting down and taking charge of money when you first start. But the rewards from both are huge, and it’s great to feel you’re finally in control.