The U.S. Department of Agriculture estimates that it costs about $233,610 to raise a child from birth through age 17, college expenses will increase the costs exponentially. Let’s face it, raising a kid is an expensively tough job. Now, raising a kid alone can be potentially nerve-wrecking especially if you don’t have a support system to reduce the burden.
Unfortunately, a large number of Americans are single parents who have to balance the delicate acts of child-rearing, jobs, and a personal life. `In 2016, there were 8.5 million single mother households and 2.5 million single dad households. The single mother households had about 17.2 million children and the single dad households had about 3 million kids.
If you are a single parent struggling to make ends meet financially, it might interest you to know that you can take some proactive steps to improve your finances. Continue reading for actionable insights that could help you take charge of your finances.
Take advantage of tax breaks
One of the smartest (probably not easiest) ways to reduce your financial stress is to take advantage of all the tax breaks available to you as a single parent. If the child lives in your place most of the time or if you are the custodial parent, you can get tax breaks on expenses such as daycare, clothing, and piano lessons. Of course, you need to seek professional advice from a tax consultant in order to know the tax breaks available to you. You can also claim head of household status when you file your federal tax returns and you’ll be eligible to receive $1,000 in tax credit for every child younger than 16 years.
Deal with your debt ASAP
For single parent households struggling financially, debt is usually a constant fixture in financial discourse because your earnings are probably not enough to cover your expenses. However, taking on debt to fund your lifestyle will only sink you deeper in the financial rut and make it practically impossible for you to attain financial independence. If you are already struggling with a debt burden, you can take decisive action to seek help to deal with debt. You may want to consider paying off your high-interest debt such as credit card debts. You might consider renegotiating your loan terms or consolidating multiple debts into a single manageable payment.
Don’t be too proud to take help from the government
The government has done a decent job of providing help to one-income, one-parent households with very low incomes. The Supplemental Nutrition Assistance Program (SNAP), which many people deride as food stamps might help you buy basic items on your grocery list. In some states, single-parent household below a certain income threshold might qualify for special health-care benefits under Medicaid. Some public schools also have endowment funds that can cover the cost (or part) of school lunches for kids.
Find ways to lower your expenses
Irrespective of the amount of government help, tax breaks, and debt forgiveness that you can find, you’ll find it much easier to improve your financial standing if you can find ways to reduce your expense. Reducing your expenses will help you have more money left over to pay down debt, save up for important purchases, or start investing for your future.
You can start by looking for ways to reduce your childcare expenses. For instance, if you are religious, your church, mosque, or temple could daycare center or have a working relationship with an organization that has a subsidized daycare center. You may want to consider shopping for clothing at the Goodwill store instead of agonizing over your inability to buy Gap Kids.