Managing your finances alone is only one of the hardships as a single mother. The huge responsibility that rest on you as a single mother often leads to stress, anxiety and definitely feelings of depression or hopelessness.
*According to Statistics South Africa, 45.6% of South Africa`s children are raised by single mothers. (*http://www.statssa.gov.za/wp-content/uploads/2018/03/Mbalo-Brief-March-2018.pdf)
Although this statistic is quite shocking, it helps to remind the single mother that there are others like her.
With that said, the question remains: How will you survive financially this month?
Is there any means of managing your small predictable income and huge unpredictable expenses?
Will you ever gain financial freedom?
The answer to these questions lie in budgeting. A monthly budget will help you track your expenses, analyse your income and help you to anticipate future financial needs.
Here are a few tips from a 30- something single mother of two girls on budgeting.
- Get your mindset right
Even though it might seem useless to draw up a budget with a small income and lots off expenses, just take a few minutes before you receive this month’s salary and write down your income and the expenses you anticipate. You can’t do much about your income, but you will be surprised how far you are able to trim and manage your expenses. The purpose of this exercise is to create an awareness of your income and expenses that goes beyond the knowledge that you don’t have much. Really knowing removes the stress and anxiety that comes with uncertainty.
- Identify the necessities
Start off by writing down the expenses with a fixed amount like your rent, school fees, medical aid contribution, funeral plans or life and car insurance. Also try to set apart some money for savings. Even if you start off with R150pm, well done. You’ll do better than most! These expenses you can’t do much about, but it is important to include them in your planning.
- Cut on costs
Next, write down the expenses with variable amounts like electricity, water, groceries, transport or petrol and banking fees. Also include a little contingency for those unforeseen expenses that could topple your budget.
- To want or not to want
Lastly write down the rest of your expenses, like debt repayments, DSTV payments, cell phone or internet bills, housekeeper, gardener or garden services and spending money. These are the expenses which if you think carefully, you could find ways to either minimise or even go without.
Subtract your total expenses from your income.
The next step will prevent you from running out of cash throughout the month.
- Work smart
Divide the amount of money you have left, through 4 or 5, depending on how many weeks are in the month.
Say for instance you have R2000 left of your income after you subtracted all your expenses. Divide the R2000 by 4 ( for a 4 week month). This will leave you with R500 per week for “bread -and -milk money”, spending money and those unforeseen extra expenses you didn’t plan for in your budget.
You can either withdraw the whole R2000 from an ATM and place R500 in an envelope marked with the dates of the respective week, or you can withdraw R500 cash each week depending on your banking fees.
It is important here to work with cash instead of swiping your card. The simple reason being, it is much easier to swipe a card than to hand out cash. It creates an awareness of funds flowing out.
Another good idea would be to divide the money in such a way that you start off with R400 for the first 2 weeks of the month and R600 for the last two weeks of the month. In this way you will have a little bit more money when you run out of groceries or petrol toward the 2nd half of the month.
Challenge yourself not to use the whole amount for the week. Try saving some of this money to pay off extra on your debt next month.
Practice budgeting every month. Soon, you will realise that you are actually managing your finances. Look at your budget daily as you spend funds. Remember that habit is created by doing the same thing day after day. You want to create good financial habits. By working on a budget you can now also start to set financial goals.