Handling debt is an art if you can do this tactfully. There are some smart ways to analyze debt and handle thing in a way that your burden gets manageable. And as the single parent, the sooner you learn this, the better you will be able to organize your life.
Your life as a single parent
Life as a single parent is not easy. There are a lot of things to cater to, and lots of responsibilities you have to take. Practically responsibilities do get doubled, and you have to fight and do all the task alone. Your source of income is one, and you have to give in all the time to your professional work, your kid, the growing needs of the family, the household necessities, etc. Hence it’s a tough life packed with events and actions, work and planning. And you have to utilize your time and energy to the fullest to ensure everything gets done on time, as needed, and the right way. And it’s tough being so perfect and organized.
Single parents accumulate enough willpower because of this social condition they go through and manage things, which is a great thing. Only if you know how to take care of the finances, how to save well, how to pay your debts and dues well on time, and how to make some wealth with time, then life can be easier, and raising the kid can be more fun.
You must save money
Whatever your earnings are as the single earner in the family, you must still save. It’s most likely that the lion’s share of the savings will go in household expenses and raising the kid, the education fees, and many such things. On top of that, you may have premiums of insurances and medical policies to pay. There may be car insurance, home mortgage EMI and many such things. Amongst all such things, it’s much important that you still save. Ideally, a person should save almost 20% to 30% of the income. But if you manage to save even 5%, then that too contributes to your well being in some way. Hence savings in any form and any amount is a blessing, and you must try to save whatever you can.
Again ideally, one must save first from the earned amount and then go for expenses. But in this case, being under the high burden of responsibilities as the single parent, you may not be able to save first and spend later. Let it be the other way for you, but still, if savings come in any form, it’s better than nil savings.
Create an emergency fund
A fund to cope up with emergencies must be created and maintained by every household, and is the single parent your responsibility to create and maintain the emergency fund is more. In emergencies, you may have none dependable to turn for help. And then you may be all on your own. Hence to get help and cope up with the first waves of the crunch, you must have some funds ready. This can be done by saving one portion of the earnings separately in an emergency fund.
Think twice before using your credit card
One of the most common culprits that easily brings a person under debt is a credit card. While the card gets issued, the common man gets happy, that now he has a card to swipe anytime to purchase necessities while not having the cash in hand. This is an advantage of having a credit card. But you must never forget that credit cards are nothing but pre-approved loans. And the moment you swipe the card you accept the loan. And you get charged interest for that loan. Therefore this decision can make you pay heavy if you use the card for any transaction which you really cannot afford.
If you take too much time to clear credit card dues, and during that period pay too much in interest, then that’s a big loss. Also, credit cards area big temptation and make you spend more than you can afford, and later you have to repent when you are charged interest on the spending, and you pay hefty amounts to clear the dues. Hence, it’s wise not to touch the card, and forget it at home most of the time, unless you need to swipe it in an emergency.
Organize your loans and debts
If you already are into the burden of one or more loans, then you must organize the debt situation. You can make a calendar for yourself. In this, you may note the various important dates. The dates on which the loan EMI must go out from the bank account, the date by which you need to pay the loan online or in cash manually, and then the various rates of interests that are charged on the various loans and the last date of EMI payment for each loan and so on. These details when written and followed will help you track the loans and payments.
In case you feel that things are slipping out of your hands, and you are no more in a comfortable situation with the debts and dues, you may then look for a smart solution like debt consolidation. Debt consolidation is another smart way to organize multiple loans. In this method, you apply for a big loan amount which helps you pay off all current debts and dues with their pre-closure penalties, late fees, etc. Get more idea about this from resources like nationaldebtrelief.com
Finally- How to use debt consolidation
A consolidated debt loan comes with some useful features. The first useful thing is that the loan is offered at a lower interest rate than what you have been paying so far. Hence this brings a scope of saving on the loan EMI amount you shell out every month. Next, the loan is offered at a longer tenure. This again makes the EMI amount smaller, thereby making it easy to fit into your monthly budget. And finally, this is approved to you when you are into multiple debts to settle all current dues and get some fresh air. Hence you can always stay organized as a single parent when you save every month, create an emergency fund, avoid credit card usage and loans, and organize unmanageable dues and dents with a consolidated loan.