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by Aubre Andrus

Becoming a single parent means accepting big changes in all aspects of your life—emotionally and financially. Although it may be a time of stress, your financial situation requires immediate attention.

In 2010, 6% of married couples lived in poverty but, in the same year, the number of single parent households below the poverty line was 27%. It can be a difficult situation, but it's not an impossible one.

facing reality
Emily Card, a Los Angeles-based attorney and author of the book "The Single Parent's Money Guide" counsels newly single parents about legal and financial issues. Card says the first step to financial freedom is accepting the difficulties surrounding your situation. Find where the money is falling through your fingers.

"It's very hard to modify your lifestyle overnight, but you really have to recognize that you can't have the same lifestyle and support a child and pay extras that come with being a single parent," Card says.

As a single parent herself, she knows that one of the biggest expenses is daycare. A 2011 study from the U.S. Census Bureau found that parents above the poverty line devote 7% of their monthly income to daycare, while those below the poverty line spend an average of 30% of their monthly income on daycare.

Single parents make one-third the income of two-parent families, according to Brenda Armstrong, Buford, Ga., author of the book "Financial Relief for Single Parents." But there's no excuse when it comes to setting financial priorities.

"[Single parents] feel like they're too busy to stop and think" so analyzing expenses and budgeting can feel like unaffordable luxuries, Armstrong says.

creating a budget
In addition to being a single parent herself, Armstrong is executive director of an organization that helps empower single parents. Before creating any budget, she recommends figuring out how your money is being spent.

"Write down what you're spending," she says. "Find where the money is falling through your fingers."

Armstrong recommends looking at every expense and asking yourself, "Why am I choosing this option and is this the right option for me?" Analyze everything from weekly fast food stops to monthly car payments, and consider what is the best financial decision for you. You really have to recognize that you can't have the same lifestyle.

Dedicating 15 to 30 minutes each week to preparation and organization can help save money instantly. For example, planning meals for the week means you'll spend less cash on fast food and waste less time at the grocery store.

"The things you can cut the easiest are discretionary in nature," Card says, noting clothing and entertainment costs.

The new budget may not be the most desirable long-term solution, Card adds, but a temporary fix is OK. If you can't make saving a priority right now because you're spending the majority of income paying off a credit card bill to maintain good credit, then so be it. Address any questions and concerns or simply further your financial education with the professionals at your local credit union.

the tough stuff
Single-parent financial issues extend beyond budgets. Life insurance and wills become even more of a priority for single parents.

"Your child is only one heartbeat away from having no parent if you don't have a joint custody arrangement," Card says. "You need to make sure your child is taken care of both in terms of guardianship and financially."

 The Single Parent Advocate

 Single Parents Alliance of America

 Mercy Tree Ministries

Card recommends drafting a will immediately and notes that you can name two different people as the physical guardian and the financial guardian. After creating a will, it's important to sign up for life insurance, even if it's only a small amount that will cover burial arrangements and transitional money for your child.

"Those are two things that people don't like to think about," she says. "But they're extremely urgent because you don't know when something can happen."

Armstrong identifies another financial peril for single parents: "Their biggest risk is staying in low-wage jobs and not moving forward." She says, "They've got to have a plan, think of what they're good at doing and how they can succeed."

Ideally, Armstrong says, you'll find a job in a field of interest. Those who do what they love are often more likely to succeed. Getting a degree isn't mandatory-even entry-level positions can lead to great opportunities for advancement when you're truly passionate about your career.

getting help
Support for single parents comes in all sizes and from all directions. Armstrong recommends reaching out to faith-based communities and organizations for support. When it comes to childcare , subsidized daycare, retired family members, and neighbors can be of great help.

Regarding insurance, Card recommends taking advantage of the discounts organizations or groups offer to members for all types of insurance. Plus, most states offer some form of medical coverage that can benefit a child in need—even if the plan has a high deductible. You can save money against that potential at your credit union. Don't beat yourself over the head and feel guilty.

Tax breaks for single parents may change each year but range from filing as "head of household" and claiming an exemption for each qualifying child to taking advantage of a child care credit. A trusted accountant can tell you which breaks you qualify for.

the silver lining
Being a single parent is not easy, but the situation does not have to be grim. Life isn't all about finances, Card says.

Published August 14, 2013

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