This post is the second in a three-part series on budgeting for single moms (and dads!). Our needs are different from those of the general population, so I think we need budgeting advice that reflects those differences. If you missed the first post, you can read it here. Check back for the next part of the series coming soon!
Last week I introduced the Single Mom Budget – a system that prioritizes spending according to a single mom’s lifestyle instead of one geared toward married couples. If you’re following along at home, you should have a budget that accounts for the following (in order):
- TV and internet
- Everything else
Now, onto the fun part! (sarcasm)
Tracking Your Spending
No one enjoys keeping up with how much money they spend. It’s especially sucktastic for single parents because you seldom have enough to do all the things you need to do, and you get all depressed watching the money disappear. That said, it is totally necessary to figure out where your money goes if you want to improve your finances.
The categories we set up before are a good starting point for tracking. Figure out the easiest way to record your spending and start doing it today. It may be an Excel spreadsheet, a document on your phone, or a used Kleenex in your purse. It doesn’t matter. Every time you spend money, record the amount and which of the 7 categories it belongs in.
After a couple days, you’ll start to notice patterns in your spending. After a month, you’ll get a good picture of how much you spend in each category. Keep tracking, even when you’re tired and the kids won’t go to bed and you’re going to be late for work tomorrow. Keep tracking when you know you bought something you shouldn’t have. Just make it part of your routine and it will eventually become easier.
In the interest of suffering along with you, here’s my spending for one day last week:
Gas was necessary, but the other stuff was a choice. $21.81 worth of choice. And I broke my rule of only eating out on Fridays. Even though that’s painful to admit, I spent it so I have to keep track of it. My bank account actually keeps track of this for me because I use my debit card for all purchases, but I’m assuming that’s not an option for everyone.
Adjusting Your Spending
The first rule of making adjustments? Don’t try to change everything at once because you will fail miserably. Pick one thing, get it under control, and move on.
Looking at what I bought yesterday, it’s obvious that I could have saved $22. I could have brought lunch from home, NOT bought two drinks, and NOT bought cigarettes. Right now, my focus is on spending less on restaurants and drinks, so those are the purchases I’ll talk about.
The best way to reduce my spending on restaurants and drinks is to first figure out how much I’m spending in a month. (That’s why you’re tracking expenses – get your list and add up all the items in the category of focus.) I can divide that amount by 4 to figure out how much I spend each week. Let’s say I spend $60 a week. What goal should I set to lower that amount? If it’s too low, I’ll go over the limit, get mad at myself, and give up. So I’ll say $50.
After a few weeks of successfully spending $50 or less on restaurants and drinks, I’ll lower my limit to $40. I’ll keep dropping the number until I can’t meet my goal no matter how hard I try – that’s when I’ll know I’ve cut things back too much to fit my lifestyle. Still, it’s amazing how much you can save by doing this. If I can cut restaurant spending from $60 a week to $40 a week, I have $80 a month to go toward something else.
Notice I’m not telling you to cut anything out entirely. We’ve all read those stupid articles about the “latte factor” and going cold turkey on things like soda or cigarettes. Maybe that works for perfect nuclear families with two parents, but it doesn’t tend to work for single parents. We are TOO BUSY to give up the things we enjoy this early in the budget process. So for now, I ask you to simply cut back a little at a time, one area at a time.
Once you’ve cut back one area and consistently stayed under your limit, it’s time to adjust another spending area using the same method.
Where We Are Now
At this point, you should have a basic budget that accounts for the following:
- TV and internet
- Debt – from most to least important
- Everything else
You should be tracking your spending EVERY. SINGLE. DAY. After doing this for awhile, you’ll have enough information about your spending habits to start making adjustments to your budget one area at a time.
In the next installment, we’ll work on finding ways to save money. In the meantime, if this information is helpful to you, please let me know, and share it with another single mom while you’re at it!
Coming soon in the Single Mom Budget Series: