Are You Ready for Retirement?

how much to save for retirement
how much to save for retirement

“How Much to Save for Retirement – Are You Ready?” – An infographic by Money Crashers Personal Finance

SingleParent$aves’s Guide to Creating a Budget

Budget. An estimate of income and expenditure for a set period of time. In simple terms, it’s a way to tell your money where to go so that you’ll know where it went.

Ever wonder where all the money went at the end of the month. If you’re like some, the question may rise the day after you receive a paycheck.  It’s just not a great way to live.

 So how do you take the boring out of budget? How do you create one you can live with? The answers to those questions are very simple yet by following the plan, the results will be tremendous.

First of all, let’s ditch the term budget. I like to call this my monthly financial master plan. Just like with other plans, it is subject to change. In fact there is a saying, “plans are made to be broken.” However, there is another phrase that I have heard throughout the years, “if you fail to plan, then you plan to fail.” With that in mind, if you want to win in your financial life, it is critical that you develop your monthly financial master plan, aka budget.

So how do you do that? What are the key steps?

There is no simpler way to answer that question except, in the words of a famous multi-national company, JUST DO IT!

Follow the tips below to get started on your Financial Master Plan (budget) today!

  1. Make a list of everything you need to pay each month – paying yourself first, mortgage/rent, insurance, day-care, gas, hair care, daycare expenses, cable, cell-phone, internet, everything!
  2. Once you have that down, average out the monthly cost for each item. You may wish to look at your banking  history for the past three months to find an average. 
  3. Next, determine how much steady income you receive each month. Unless absolutely necessary, I wouldn’t recommend adding child support to this number, especially if it’s inconsistent. The goal is to live off of what you make so if you do receive child support, its an added bonus that can go towards debt payoff then building an emergency fund. If you don’t, it won’t cripple your finances.
  4. If you get paid bi-weekly, decide how much you need to set aside from each check to cover the monthly cost. If you get paid once a month, you should be fine.
  5. I would highly recommend adding categories for sinking funds such as gifts, irregular expenses, car maintenance, etc. This will help you set aside cash so that when those bills arise, you have the cash to cover them.
  6. Next steps include actually making the budget. I like to use a spreadsheet that automatically calculates the numbers when I input formulas. Simply put, your income starts at the top, then each item you pay during the month gets subtracted from that number. It’s quite simple.
  7. If a spreadsheet is not your cup of tea, use a budget app to create one. There are tons of great ones out there and they can even link to your primary checking account.
  8. When doing your budget, try to tell every dollar where to go. Don’t leave anything to chance. Budget for everything so that nothing goes undocumented and no dollar is spent on a whim. In fact, create a line item for “fun” if you have any cash left after taking care of all of your savings and obligations. You earned it, so you should treat yourself to something each paycheck, even if it’s a small ice cream cone at the end of each month.

That’s it! Voila! This is a very simplified way to start your budget, but really, its all that is needed to get you started on the path to financial freedom. Don’t worry if you have to change some of your allocations or things don’t turn out as planned. In the words of Lau Tzu, “The journey of a million miles begins with one single step.” Get started on your budget today!

So what are some of your budgeting tips? Any successes? Failures? Join our Facebook group at SingleParent$aves to be connected to a community of super savers like yourself.

Happy saving, live well!

Must-Teach Money Lessons for Your Kids

Teaching kids about money is the best gift any parent can give. The sooner you start, the better their outcomes.

If parents are the first teachers of their children and we want to teach them how to be successful in life, then it is essential that along with ABC’s and 1-2-3s, parents teach their kids about money.

Most schools leave out curriculum that features personal finance or practical money skills. Math class tests basics such as multiplication, division, addition, and subtraction, but not with money management in mind. Learning about calculating numbers is totally different from understanding money and how to make it grow.

What’s the use in getting a good education to start a great career if all you’re going to do is waste your money?

Pointless right? The key to a successful future is not only earning money but knowing how to manage it. In order to get kids ready for that fact of life, parents must lay the foundation of financial literacy by teaching the following money lessons. Don’t leave it to the schools, do it right by doing it yourself.

Wait, what? Did you say you don’t know enough about money to teach them? Baloney! You’ve come this far, so at the very least, you know something. Even if its what not to do with money, you, their parent, has the power to educate then inculcate solid money skills into your kids. Even if you must read financial books or watch YouTube videos together, there are no excuses. Just get it done!

Money Lesson 1: Income vs. Expenses

Kids need to know that income is used to pay expenses. They should learn about earned income, or money your work for, and passive income, or money that works for you. They need to understand that expenses should not be higher than income, if you want to be financially secure. Pay them for chores and grades so they learn how to earn income. This is the easiest way to teach money lesson one.

Money Lesson 2: Needs vs. Wants

Everyone has needs that don’t always match what we want. Kids must understand the difference between the two and how to prioritize needs over wants. They should learn how to pay for all of their necessities before they pay for the latest video game, or fake cash on Minecraft. If they don’t have enough income to pay for their needs, then they must earn more to afford what they want. Teach your kids that it is not always wise to pay for all of their wants, or they’ll constantly be unhappy, always wanting more. This is a great time to teach kids about gratitude too, but that’s another lesson.

Money Lesson 3: Share, Spend, Save

Once kids learn how to earn income, they need to learn what to do with it. Three ways to divide money is to dedicate a percentage of their income to sharing (or giving to charity), spending (on needs and wants), and saving (for their future or bigger purchases). There are many ways to teach these principles, but the simplest is to give them a piggy bank with the three categories, or open a bank account for each fund.  By separating cash for different uses, it teaches them to use money wisely to accomplish their goals. As your kids get older, its necessary to start teaching them about investing and earning interest. They’ll thank you later.

While it may sound complicated, these three money lessons can begin as soon as your child is ready.  I started mine early and they have grasped the principles well.  Not only will teaching money lessons help get your child ready for life, they will also get an early jump on skills needed for school. These money lessons will also help reinforce proven money habits in you as you work to explain them to your kids.

*For more great articles on kids and money, check out the article “Pay Your Kids for Chores and Grades.”

What money lessons do you plan to teach your kids? What lessons do you wish you had learned sooner? Please share in the comments below. Also, join our community of super saving single parents on Facebook by clicking here (SingleParent$aves).

Happy saving, live well!

You Don’t Have to Be Smart to Be Rich

Building wealth and saving money is more about behavior than book smarts. Financial freedom can be achieved by everyone.

People often equate wealth to intelligence. While it seems that the correlation may be high, that just isn’t so.  Earning wealth and gaining financial freedom is as simple as making a sandwich. If you follow these four steps, you will be well on your way to being a single parent that is financially stable and living a debt free life.

Step 1 – Be focused.

In order to gain financial freedom, you must be focused. In order to be focused, you must have goals. Once you have goals, you need a plan to achieve them. By having a goal and a plan to achieve it, you are setting yourself up for success since you will be focused on reaching that goal. Its like a trip. If you get in a car in search of your dream vacation, you’ll fail. How will you know if you’re headed in the right direction, or if you’ll even reach that destination if you haven’t detailed what it is you’re trying to do? Have a goal, make a plan, stay focused. Its that simple when building wealth and eliminating debt.

Step 2 – Be Determined.

Determination is the quality single parents need if they want to overcome many obstacles, including financial ones. Challenges will come, that’s guaranteed. But in order to take control of their finances, single parents must be determined not to let unexpected expenses, debt, stress, and a helpless attitude lead them down the road to debt, or keep them there. Being determined helps with focus and both of these qualities have more to do with behavior than intelligence.

Step 3 – Be intentional.

Intent is having a purpose for doing something. It covers being resolved, committed, and “set on” whatever it is you want to do. Being intentional requires putting the focus of a plan, the determination of a marathon runner, and the purpose of a dedicated individual together in order to power your way to success. Having intent means that you will think before making that impulse buy and leave it in the store, instead of indulging. Being intentional means being deliberate, planned, and making decisions based on the sole purpose of achieving your goal. Again, none of this requires an Einstein intellect, rather, the patience of Ghandi.

Step 4 – Be Ambitious.

Ambition is the trait of being determined, motivated, striving, and a “go getter.” Sometimes the word gets a bad rap, especially when associated with people being ruthless, but being ambitious when it comes to getting one’s financial house in order is necessary in order to break the chains of debt. Ambitious people dream big and let nothing get in the way of their goals.  There is a healthy balance in being ambitious that is necessary in order to obtain financial freedom. Its in all of us and can be cultivated by following the first three suggestions.

Focused.Determined.Intentional.Ambitious. Those are the qualities that it takes to be successful and get rich. Single parents are in the best position to take control of their finances since they are the only one in the driver’s seat. While having a second income may have its perks, following the four steps above will get anyone in the right position to take control of their money and financial destiny. So what are you waiting for? Get started now!

What qualities do you think are necessary to be rich? Please share in the comments below and join our Facebook group, SingleParent$aves, to be part of a community of savers like yourself.

Happy saving, live well!  

Ten Tips to Stay Focused on Your Financial Goals

Staying focused on financial goals can be a constant struggle. Use these tips to stay headed in the right direction.

As the year rolls on, many people have lost their excitement in achieving their financial goals. Everything from a broken appliance, car repair, or an unexpected expense can dampen the spirit of even the most dedicated people. 

But why should “unexpected events” like that slow you down?  Guess what, they can’t if you are prepared and have a plan.

But how is it possible to plan for expenses like those? Easy, have a sinking fund.

Car expenses are inevitable, hence they really aren’t “unexpected.” If you own a home, something will always go awry, so those tabs aren’t unexpected expenses either.  The point is, there really is no excuse to be unprepared in the event of an “emergency.” Follow these ten tips to stay focused on your financial goals and to be prepared for the “unexpected.” Just click on each hyperlink to be sent to an article to help get you started (or keep you rolling) in the right direction.

  1. Have a plan, set SMART financial goals. The saying goes, “If you fail to plan, then you plan to fail.” Don’t start out on the wrong foot, set smart savings goals if you want to achieve them.
  2. Start saving today.  In order to get the full benefits of compound interest, the sooner you start, the more you’ll save.
  3. Find ways to cut costs. As single parents, choosing the right daycare, cutting your cable bill, and saving on groceries can be like getting a second job! This is one of the easiest ways to keep money in your pocket. What cost can you slash?
  4. Decide to be debt free. Rid yourself of the burden of credit card debt and find a plan to help chart the course. Click here for one that worked for me.
  5. Use sinking funds to be ready for those “unexpected expenses.” This article talks about vacations and car insurance, but you can create accounts for anything you need to save up for.
  6. Be nice to yourself and allocate money for self-care.  While it is important to save with intensity, you must enjoy life now. That’s why its important to maintain the right balance with your money.
  7. Stay encouraged by reading about personal finance and saving. These 5 books will change your life.
  8. Have a plan for the unthinkable. Two emergency funds may be best if you want the security of a six month emergency fund for job loss, plus money set aside for those pesky “unexpected emergencies.” I feel better with two in place, although one is a start.
  9. Avoid making money mistakes. Choose a home you can afford and consider purchasing a mature home. Also, don’t try to keep up with the Joneses. Stay focused on your money goals. Avoid these other traps.
  10. Just have fun. We only have one chance to live life. Try not to stress over things and enjoy the life you’ve been given.  Hindsight is 20/20. Instead of dwelling on what you didn’t do or what has happened in the past, get excited about the wonderful opportunities that are sure to come – especially when you’re financially free and building wealth.

What tips will you try first? Pick two or three then share in the comments. Also, join our Facebook group to be linked to a community of single parent savers like yourself.

Happy saving, live well!

SingleParent$aves’s Six Super Tips to Boost Your Savings

Watch your money grow by following these super saver tips.

Being a single parent can result in financial struggles since there is only one source of income. Regardless of whether your salary is high or low, single parents must find a way to save money. Not just for emergencies, but also for their future – aka retirement. With that in mind, it is all too easy to say “I can’t afford to save any money!” While I understand your pain, being a single parent has earned us some grit and with that comes a no excuses mentality.  This means that while you may be strapped for cash, you must either increase your income through a side hustle, or cut your expenses, in order to make saving a priority.

Try the following six steps to super charge your savings today!

  1. Pay for everything with cash.

Paying with cash is an easy way to spend less. If you don’t have a debit or credit card with you, you can only pay for “stuff” with what you have.  If the total exceeds your cash on hand, items have a way of making themselves back to shelves. This is a great way to boost your savings since you won’t tap into it to make purchases if you only use cash. One added bonus of a cash-only lifestyle is that you can collect all of your change and save in a piggy bank to treat yourself once its full. I actually do this myself and plan to use my coin savings for a much needed massage.

 2. Use sinking funds.

Sinking funds are savings accounts used to save money for recurring expenses. Think insurance payments (if you prepay), holidays, vacations, birthdays, car repair, home repair, etc. I like to send a few dollars from each check to different accounts so that I’ll know what’s available.  If you’re asking if you create a separate account for each fund, my answer is yes.  Many banks will allow it and it helps make budgeting easier. Learn more about saving with sinking funds here.

3. Create an allocation system to plan how to divide large sums of money.

“If you fail to plan, then you plan to fail.” Single parents have a pretty good idea of when they will be blessed with extra cash – tax season, the extra pay-check you receive each year if you’re on bi-weekly pay, etc.  Having a plan for how to allocate those funds helps ensure you don’t waste it all and put some aside in savings.  Its OK to say you’ll spend some, but make sure that you save most of it, and if you haven’t gotten out of debt already, use it to pay off those pesky credit cards. Developing a plan makes sure you don’t walk around in misery wondering where all the money went.

4. Start having fun for free.

In order to keep cash in savings, you must learn to have fun for free. There are several websites in major cities that provide daily and monthly listings of places to eat and events to attend for free. Many use the extension “fun for kids” and your city’s nickname. Check search engines to see if there is a chapter in your area.  If not, do some searching yourself. See what days museums offer free visits. Have picnics with your kids. Check-out local nature trails and beaches (if you’re nearby), and spend time outdoors. By entertaining for free, your savings stay intact and earn interest. That’s a win-win for everyone!

5. Use apps to set savings goals and track your progress.

I absolutely love apps that allow you to track your spending and set savings goals. Many allow you to attach a savings account to a specific goal and will give you regular updates on your progress.  If you’re like me and love to set SMART goals, using an app is a great way to get motivated and stay determined to super charge your savings. This tip can be used for both short-term and long-term goals, whatever you desire. So download an app and get it set up to start saving today!

6. Practice gratitude to enjoy what you have.

If you are happy with what you have, then you won’t want for more.  Practicing gratitude allows you to be content. That doesn’t mean that you settle for less, it means that you save money because you are not on the comparison bandwagon to impress anyone.  Being thankful for what you have super charges your savings since you’ll find more joy watching your bank account grow than shopping for more to keep up with the Joneses.  This is the most valuable, super-charged advice of  all time.

Using these tips is sure to put a satisfying boost in your savings. Saving is essential for any single parent since the demands of being the head of household can sometimes be overwhelming. With a little planning and a lot of determination, super charging your savings can be done!

So what are your tips for boosting savings? Share in the comments below. Also, join our Facebook community at SingleParent$aves to get even more involved with fellow savers like you.

Happy saving, live well!

How Avoiding Financial Talks Leads to Generational Poverty

Sharing knowledge is the most powerful way to end the wealth gap and start a legacy of financial freedom.

One of my goals last year was to start opening the dialogue about personal finance with friends and family. All too often people avoid talking about money for various reasons. Maybe they don’t know much about it themselves and don’t want to look silly. Perhaps they are ashamed of their finances and don’t want people to know their struggles. There are a plethora of reasons why people don’t discuss money, even though its what drives much of our behavior and is the easiest type of information to share in order to avoid costly mistakes. The failure of people to talk about personal finance is the reason why generational poverty, instead of wealth, is so rampant.

Recently I had the pleasure of speaking with several amazing women at a “Dinner and Desserts” gathering. The hostess wanted to encourage women of various ages, experiences, and backgrounds, to have healthy discussions about whatever our hearts desired. Surprisingly, the topic of money emerged. One of the women stated that her parents was of the generation that didn’t know much about finances, so they couldn’t teach it. They had to learn on their own. While that may have been a barrier back then, we can no longer use that excuse in the Internet Age.

With so much information available – blogs, podcasts, the internet – it is hard for parents not to learn what it takes to be financially successful. Knowledge is at our fingertips and it is up to us to share that with kids in order to embolden them for the future. Additionally, let’s not forget the most powerful teaching tool available, our own personal experiences.

Some may argue that children don’t need to be burdened with adult issues such as money and personal finance. I beg to differ. The earlier kids learn the basics, the better prepared they are to tackle life’s obstacles. In fact, you may be surprised to see how they may pitch in to help save which may get the entrepreneurial spirit started in them as well.

As the conversation continued, many shared the same sentiment – “My parents didn’t teach me about that.” We as single parents MUST inculcate healthy financial habits into our kids, with the same fervor and intensity as we push the power of education along with the benefits of healthy eating.

In a recent post in our SingleParentSaves Facebook group (join by clicking here), members were asked to share money lessons they learned as children.  How enlightening! It seems many were taught that they should save, but what about the why? Investing lessons? Nope. The benefit of charitable giving? Nada. How heartbreaking!

A well rounded financial plan involves four fundamentals – giving, spending, saving, and investing. If children are to be given the tools they need to end the cycle of financial struggling, generational poverty, and going into debt to “keep up with the Joneses,” then we must be open and honest with them as soon as possible.

What better gift to give your kids than the gift of knowledge? However, too little knowledge is crippling. Don’t just teach them about saving, they need to understand the benefits of  investing. Teach them about the differences between needs and wants, but also that its OK to take care of themselves. They need to know that there is more joy in giving than receiving, so being charitable is essential. Teach them to start saving as early as possible to take advantage of compound interest. Show them how creating a budget based on percentages will make sure they know where all of their money is going. Tell teens they can open a custodial Roth IRA as soon as they begin earning income.  Teach young kids lessons on income, expenses, and prioritizing their money by paying them for chores.  Whatever you do, teach them now!

Children are resilient and need to know as much as possible from reliable sources, such as you, now more than ever. They can access all kinds of information online, valid or not, which can cause serious harm if not given in the right context. Have candid conversations with your kids and reap the benefit of knowing that you laid the foundation for them to be financially free for life. You can do it and your kids are ready to learn.

I challenge you to talk to your friends and setup a “desserts and discussion” event to share knowledge with people you know and trust. Let us know what you plan and how it goes in the comments below. Join the SingleParentSaves Facebook group to stay engaged and active with fellow savers. Together, we can end generational poverty and begin the cycle of generational wealth.

Happy Saving, Live Well!