As a Single Mom, I am the CEO of a little sole proprietorship known as, Mi Familia. A multifaceted, non-profit, organization with only one revenue stream…… ME!!
When I was married, I paid all of the bills and drove most of the financial decisions. So handling money, bills and reconciliations is not new to me. However, Money Management was a whole new challenge with a reduced income, no spending accountability and no fall back plan. Where is the collaboration on how the money is to be spent? Who is gonna stop me from buying another pair of shoes? Who do I blame when the money runs out before the month does?
Since that time, I have studied many aspects of Money Management. There are great tools out there that teach everything from the basics of Money Management through the intricacies of Wealth Building. It became the difference between Surviving and Thriving for me.
And it all begins with the most old-fashioned of notions; Living within your means and sticking to a budget.
This Single Mom’s best friend is my budget. This tool, when used daily ( I do mean daily), allows me to own my world. I think of my budget as an allotment of money, much like an allotment of calories. If you overspend the allotment of calories for the day, then you will gain weight. If you overspend your allotment of money for the month, you will go into debt. And having debt is a lot like carrying around extra unwanted pounds. Uuugh!
The concept of Zero-Based budgeting, as taught by Dave Ramsey , is how I plan my spending. My budget for the month shows how every dollar will be spent before the month begins. I know that all my needs will be taken care of each month and in sticking to my budget, a few of my wants will be satisfied, as well.
This is based on the idea that each and every dollar is spent, on paper, before the month begins. Beginning with the basics, I write down the monthly amount for each of these: Rent/Mortgage, Water, Gas, Electric, Food. If I can pay these bills, then the kids have food and shelter and life is good.
Got money left over? Good. Then I write down the monthly amount for each of these: Clothing, Auto, Insurance, Gas, Daycare. If I can pay these bills, I have everything I need to get to work everyday.
Still have money left over? I address my debt. If you have debt, then get on a schedule to pay these bills off and add these to your monthly budget. Remember: Paying the minimum on your debt will keep them around FOREVER. Pay as much as you can on the smallest bill each month until it is gone and then move that money over to the next debt.
Finally, I make sure I put some money for savings (10% is recommended) and some for giving, maybe some blow money (money to spend however I want) and there should be $0 left to spend at the end.
A simple spreadsheet can help you set up your budget.
The Why’s of Budgeting
Debt is dangerous. Especially for a Single Mom. I have one income and controlling where that precious money goes is imperative to my survivability. If you are living beyond your income, then you are incurring debt. Stop that now!
Budget is a “NO” wins situation. When my budget says “NO”, then I can win every argument with your kids. You can always blame the budget, like it’s a third person at the dinner table.
I have found that planning my money ahead of time and spending accordingly makes it feel like my money does more. Once you stop letting money slip through your fingers, you will be surprised how abundant your money feels.
A budget is empowering. Making decisions over who will and won’t get MY money puts me in control and that can be very satisfying.
A Final Note
If the word Budget feels too constricting, please feel free to refer to it as a “Spending Plan” or a “Cash-Flow Plan”. Whatever you call it, if you don’t have a plan, your money will just slip through your hands.
I recommend the following websites for online tools:
I recommend the following books for more insight into budgeting and other money matters:
The Total Money Makeover – Dave Ramsey
Debt-Proof Living – Mary Hunt
Next Wednesday: Ways to Avoid (additional) Debt