CC0 Licensed Image Courtesy of Pexels
A single parent emergency fund is a lifeline when, well, life happens! Not having enough to cover the costs of something unexpected places enormous pressure on anyone, never mind a single parent family. With some small changes and a bit of research you can make it easier.
Getting Around Murphy's Law
If something goes wrong, it probably will at some point. Life has a way of kicking you when you're down, and money worries are often among the worst things we experience. An emergency fund means you can cover the costs of something unexpected, such as a burst pipe, a blown fridge, or even the car not starting. Easy access to money for looking at 2nd hand cars is much more convenient and quicker as taking a car to the garage can be pretty expensive.
Single Parent Emergency Fund for Loss of Income
Just like anything unexpected can happen at any time, you can lose your job. This is one of the worst-case scenarios, as it means no income. State benefits are a nightmare to navigate, take ages to sort out and often don't cover the basics. An emergency fund of around three to six months' worth of living expenses should be enough to cover you until you find a new job. Around 55,000 workers lose their jobs every day in the UK alone, so it helps to be prepared.
Health and Medical Issues
Most of us look after ourselves and our families, and it can even be enjoyable when you throw in some wellness treats! But we can often face serious medical issues. Even the healthiest people in the world get cancer, for example. There are also unexpected emergencies, such as a serious injury. In these cases, you are entitled to statutory payments from your employer. But it doesn't last forever. An emergency fund helps keep your home running smoother while off work.
Beginning a New Budget Plan
Budgeting is one of the most sensible things you can do whether you are a single parent or not. When you come up with your new budget plan, be sure to include an emergency fund in it.You may not have the money to put in huge amounts, to begin with, but just having it there and knowing you can fall back on something gives you huge peace of mind. When you begin budgeting, just be sure that you have removed essential funds before committing to savings.
Single Parent Emergency Fund as Self-Employed
Being self-employed is very freeing for some people. It can also be a lifeline for single parents who don't have a lot of flexibility. However, there are also many more responsibilities that come with it. One of them is paying yourself, which you can use for building an emergency fund:
Set goals for putting money aside that you can meet without depriving yourself.
Track income and expenditure so you always know how much you have.
Use little tricks to save money around the house for your fund.
Open a savings account with your bank so you aren't easily able to spend the money.
Add money past any savings goals if you have it to spare; the more, the better.
Ensure you have enough money for business outgoings before savings.
Don't use the same account for your business and personal income.
Single mothers who are self-employed make up 13% of the self-employed workforce in the UK. This means you only have yourself to rely upon. You must put aside funds for your future as a self-employed person, as you are responsible for managing your money, including taxes!
Looking After the Children
Of course, the whole reason you need money as a single parent is to look after the kids. We all want the best for our kids, but this is increasingly hard with everything rising in cost. Even a school uniform can set you back quite a bit these days. An emergency fund helps with the costs associated with your kids growing up. This includes clothing, as some of them grow like rhubarb! But there are also supplies, school trips and, of course, expensive social holidays.
Keeping a Roof Over Your Head
Rent is one of the most expensive outgoings we have, as is a mortgage. With the costs of food and energy rising all the time and wages pretty much stagnant, it has become harder to meet bills over the past couple of years. An emergency fund will help keep a roof over your head during difficult times when you might have to use rent or mortgage money for something else. This is common, so don't be embarrassed. The trick is taking out only what you can put back in.
Debts and a Single-Parent Emergency Fund
Another thing you shouldn't feel embarrassed about is debt. Everyone has debt, even the super-rich! Of course, you probably aren't rich, and even a relatively small debt can feel massive when you don't have the money. But you can climb out of any situation. In the UK alone, about 76% of single-parent families are in debt. An emergency fund can help you steer clear of debt or relieve the financial burden a little. It also means you don't have to get into debt to pay another!
You're the Only One with Income
As a single parent, you are the sole breadwinner. This is a passive burden to shoulder, even with one child. The family relies on you to provide for them, and this places enormous stress on you as an individual and the family as a whole. With some practical money tips, such as an emergency fund, there is always money available for those times when it is really needed. This alone provides a great deal of peace of mind, just knowing you can keep things stable at home.
Summary
Things go wrong all the time, so a single-parent emergency fund will help get you out of a bind. You can also avoid getting into debt. And there is peace of mind knowing you have cash to use.