Becoming a suddenly single dad ushers in an onslaught of change. Chief among them are the financial problems that affect income, housing, savings, and retirement. In a sea of change, managing finances can get pushed to the bottom of a long to-do list and it’s often hard to know who to turn to for solid advice.
I know what it is to stare at a drastically changed financial present and future. I’m a Type B who doesn’t enjoy dealing with the Type A administrivia of paying bills and balancing accounts. But I’ve come to appreciate the peace of mind that comes with managing my money and avoiding financial problems. So, let’s tackle these 5 financial mistakes single dads make.
1. Wasting money you don’t have.
As dads, we often want to shelter our children from hard realities. We don’t want our kids to feel the financial pinch or a changed lifestyle. But spending money we don’t have won’t help us or our children in the long run. It will just add to your financial problems.
Solution: Create a budget.Making a budget sounds limiting, but it’s actually freeing.
Making a budget sounds limiting, but it’s actually freeing. For example, I usually roll over my clothing allowance for several months, knowing I’ll use it for back-to-school shopping. Having your own monthly fun money, even a little, frees you from guilt for a dinner out or new running shoes. Setting money aside for that in advance means you know you can afford it.
2. Ignoring where your money is going.
How many of us have gone through a wallet of cash wondering where it all went? Whether handing cash to kids or swiping the debit card, it’s easy to nickel and dime money away. Regardless of how much we make, we need to be the boss of it.
Solution: Track your spending.
Tracking your spending helps you realize real needs and stay within budget. There are three ways to track spending. First, use pen and paper to record by category each month. Second, use an app like Mint or Dollarbird. Finally, use real envelopes filled with cash for the categories not paid online.
3. Borrowing for unplanned emergencies.
Nothing can undo well-planned finances like an unplanned emergency. Things like a broken water heater or backed up septic don’t fit into a monthly category. Using a credit card for emergency expenses can undermine all the hard work of staying on budget.
Solution: Create an emergency fund.
Creating an emergency fund keeps you on track with unplanned expenses. Most experts suggest starting a $1000 emergency fund and increasing it to equal 3 to 6 months of income. In my own experience, an emergency fund is invaluable. When the unexpected happens, you can breathe easier knowing you’ve got money to use for that.
4. Postponing financial decisions.
Analysis paralysis often accompanies all the financial change that comes with becoming a single parent. But not doing anything is a decision and can affect your finances for years.
Solution: Find outside help.
Find a trusted family member or elder in your church who has managed money well and ask him or her to help advise you.
5. Oversharing finances with your kids.
While children need to know we’re on top of our finances, oversharing can overburden them. Don’t share frustrations about bills or an ex-spouse and don’t relay worries about future finances. Be careful not to make them feel guilty for asking for money or expressing wants.
Solution: Shield your kids from financial pressure.
The second night after my spouse died, my kids came to me worried about our finances. I shared enough to let them know it would look a little different but that we would be OK. I let them know I was capable. Nowadays, when I need to vent fear and worry about finances, I scratch it out in writing or voice it to a friend—and then go back to parenting my kids.
Sound off: What part of managing your finances as a single dad is most difficult?
Huddle Up Question
Huddle up with your kids and ask, “What is one thing you wanted to buy in the last year? Did you have the money? Why or why not?”