The Trials And Tribulations Of Managing Money As A Single Parent // This Is My Story

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Many of you may not know this, but at one point, I was a single parent. In fact, I was a single parent for quite a few years before meeting and marrying Mr. MMM. During that time, I was the sole provider for my daughter and me. I was working full-time, taking care of a rental property, subsidizing my mother, and getting my master’s degree. To say it was a busy, stressful time would be a gross understatement. Somehow, I was able to successfully manage my money during those rough years. I wasn’t doing everything right. But I was making ends meet. And here’s how.

Single Parent Vs. Single Mom

I’d like to start out by explaining why I considered myself to be a single parent as opposed to a single mom. In my opinion, single mom has an automatic negative connotation attached to it and I wasn’t about to give anyone the satisfaction of immediately lumping me into such a category.

It’s also been my experience that single moms are often looked upon with pity while the exact opposite is true for single dads. Single dads are looked upon like they’re superheroes.

Feel free to disagree, I’m just voicing the experience I had as a single mom. Therefore, I chose to consider myself and refer to myself as a single parent. It might not have made any difference to how others viewed me, but it sure did make a difference in the way I viewed myself.

Now, with that out of the way, let’s dive into how I managed my money as a single parent.

The Situation

Most people arrive at single parenthood not sure what to do or how to handle it. I was no different. During my tenure as a single parent, I was living in an apartment and had the sole responsibility of supporting myself and my daughter.

In addition to rent, utilities, food, and everything else that goes into supporting two people on a single income, I was also subsidizing my mother’s living expenses to the tune of about $800/month.

My mother lived in my rental property about 15 minutes from my apartment. About this time, I’m sure you’re wondering why I didn’t just move my daughter and myself into the home I owned (but still had a mortgage on) and live with my mother.

The answer is a complicated one. But I can assure you that, for my own mental health, I did not want to live with my mother. I saw that as an absolute failure (unwarranted, I’m sure) and was hellbent on staying my course to support everyone on my single salary.

Speaking of my single salary. Thankfully, I had a college education under my belt and continued to earn a nice salary with excellent benefits as a single parent. My salary was nice but it wasn’t mind-blowing. At the time, I was making more than $50k/year but not yet close to $100k/year.

Let me break it down and list my expenses:

• Rental house mortgage (plus additional expenses below)
  • water
  • sewer
  • trash
  • maintenance
  • repairs – I paid for a ton of repairs (new oil tank, rebuilt chimney, brick pointed, basement waterproofing, etc.)
  • remodeling – I did a lot of remodeling (hardwood/slate floors, new appliances, new paint throughout entire house, etc).
• Rent for the apartment (plus additional expenses below)
  • water
  • sewer
  • trash
  • utilities
  • cable
  • phone
  • car
  • insurance
  • student loans
  • food
  • clothes
  • entertainment
  • vacation – Ha! Just kidding. There wasn’t any money for vacations, Silly. I took one vacation the entire time I was a single parent and I sold a keepsake I had from my dad to fund it.

Managing My Money As A Single Parent

When it came time to manage my money as a single parent, I had to make sure I anticipated every expense because there was never much left over. I also didn’t have a safety net or anyone I could turn to if I didn’t manage my money well.

If I didn’t have money to pay a bill, the bill wasn’t getting paid. Fortunately, I never found myself in this situation. Although I did come close a few times.

The way in which I managed my money back then isn’t much different than the way I manage it today. Back in those days, at the beginning of each month, I actually sat down at the kitchen table with a pen and paper (now I use Excel and Personal Capital) and recorded each and every anticipated expense. Expenses included everything from the mortgage and rent down to birthday presents and haircuts. Nothing was left out. It truly was a zero-based budget.

Now, you might be wondering what the heck I was doing buying birthday presents for people if I wasn’t contributing to my retirement accounts. And that is a valid question. The short answer is that I should not have been buying anyone anything if I wasn’t able to save for my future. Let’s go ahead and chalk that up to a financial misstep – one of many I have made during my lifetime.

After the budget was set for the month, I categorized which bills would be paid using the first paycheck of the month and which bills would be paid using the second paycheck of the month. Then, as the checks rolled in, I would immediately sit down and execute the payments.

I made my payments through my bank’s portal but never had any automatic payments set up since I lived so close to the financial edge each month. To this day, I continue to opt out of automatic withdrawals because I’m still afraid I won’t have enough money in the account to cover certain bills if a withdrawal is executed unexpectedly.

This is mostly illogical now, but I keep with it because I run the accounts low on purpose. Nowadays, anything not earmarked for bills is immediately transferred to savings/investments for optimal growth. #winning

Extra Money And What I Did With It

Back in the day, I was paid on a bi-weekly basis, which meant most months I received two paychecks. However, there were 2 months out of the year that I received 3 paychecks! Those were happy times. I looked forward to a little extra wiggle room and oftentimes used the extra to pay for Christmas presents, minor expenses, car inspections, or savings.

Then there was my annual bonus. My annual bonus was typically anywhere from $3,500 to around $9,000. Less appropriate taxes, of course. And as you might expect, these bonuses were (and still are) heavily taxed.

Let’s say for argument’s sake, I brought home an average of $5,000 extra each year. I mostly used this money for major expenses or rental property remodeling/repairs. One year, I paid off one of my student loans. The next year, I paid off my car. Although I truly needed some time off, I never had money for regular vacations.

I did, however, take my daughter to the beach and NYC for day trips here and there. I felt it was important for her to get out and see as much of the world as my wallet would allow. Although it was exhausting driving 4 hours one way, spending the day at our destination and driving 4 hours home the same night, it was still worth it, in my opinion.

Financial Missteps And Wins

Obviously, I have experienced many financial missteps and wins along my FI journey. Although I still haven’t reached my final destination, I’m getting closer with each passing day.

Feast your eyes on my missteps and wins:

• Financial Missteps
  • Stopping retirement contributions in my early 30s
  • Taking a 401(k) loan at the bottom of the market
  • Continuing to rent an apartment and not moving in with my mother
  • Keeping 2 cars – this deserves a post of its own
  • Buying my current house without any emergency savings at all – I had $200 left in my bank account after settlement
• Financial Wins
  • Not blowing my bonus money on things that weren’t necessary
  • Refinancing my rental mortgage from 8.7% to 3.9%
  • Paying down debt I had racked up (credit cards, car loans, and student loans)

Related content:

• Parents: Stop Taking On Student Loan Debt For Your Kids
• How Should Parents Talk To Their Kids About Money?
• You’re Not A Bad Parent If You Can’t Afford To Save For College
• Our Surprisingly Lazy (and Free) Money Management System

What I Wish I Had Done Differently

When I was a single parent I was in my early 30s. Obviously, being in your early 30s with a decent-paying job is the ideal time to be maxing out retirement accounts in an effort to achieve financial independence as early as possible. But, alas, I stopped contributing to my retirement accounts altogether during this time.

Not only did I stop contributing to my accounts, I also racked up a small fortune in credit card debt over the course of the next few years as I was rebuilding my life and becoming a strong, independent, single parent.

So, what did I do? Not only was I not contributing to my retirement accounts, but I also tapped my 401(k) in the form of a loan. When did I do this? Oh, right around 2008. You know, when the financial crisis hit and the market bottomed out. Yep. I pulled a big chunk o’ change out of my 401(k) at the lowest point. Isn’t that how things usually go when you’re in a pinch? Why, yes. Yes, it is.

If I had it to do all over again I would’ve swallowed my pride and moved into the home I already owned with my mother. Despite my mental health, I would’ve been able to continue contributions to my 401(k) and IRA. In addition to retirement contributions, living with my mother would’ve significantly cut down on my monthly expenses and maybe even allowed some room in my budget for a much-needed vacation or two.

But, as life goes, hindsight is 20/20. And let’s face it, the story wouldn’t be nearly as juicy had I made all the right moves in my time of crisis. 🙂

The Moral Of The Story

The point of this story is that not everyone’s journey to financial independence is a straight line. Mine certainly is not. Sure, it’s easy to achieve FI early in life if you make all the right moves from the start and don’t stray from the plan.

For the rest of us, FI is a long and winding road that has a few exit and entrance ramps along the way.

Whatever you do, don’t compare your journey to the journey of others. And don’t feel defeated when you see people half your age retiring to travel the world. Celebrate their wins. We’re all a part of this community together. Their win is your win.

So if you happen to be on the crooked side of FI like I am, don’t sweat it. You’ll get there, eventually. And when you do, you’ll have quite a colorful story to tell. Cheers!

Have you had experience as a single parent or being the sole financial, household provider? If so, what did you do right (and wrong)?