How Single Moms Can Start Eliminating Debt
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Are you a single mom struggling with eliminating your debt? Perhaps you may want to make a plan to financial freedom, but don't know where to start or how to execute? This year I've made achieving financial stability one of my main goals for the year 2017. In this post I'm going to give you four tips on how to help eliminate your debt.
Now let's talk about your debt elimination action plan. One cannot simply say they're going to eliminate debt and poof, debt-be-gone. Make a plan. Start by writing out your desired outcome and consider giving yourself a realistic time frame; especially considering the amount of debt you may have. I personally recommend giving yourself a year and go from there. Now onto the 4 steps to get on the road to financial stability.
best way to clear debt is by Identifying the Unessential
Go through at least 3 months of bank statements and write out your disposable expenses. Average out how much you spend on items in clothing, entertainment, debts (credit cards and loans), grocery, restaurants. This will get you thinking about where you are right now, and help you identify your goals.
Eliminate the unessential that takes up too much of your money with no value in return. You should also make a habit of keeping a daily expense dairy to keep track of your everyday expenses and weak spots. Going all out on Starbucks every morning may not seem so big at first, but keep in mind expenses do add up. If you're a caffeine lover like me, think about getting a Keurig.
ways to reduce or eliminate debt
Alright so here is where a tremendous amount of willpower needs to kick in because here comes the hardest part in your debt-to-freedom journey; sacrifice. Stick to the things that you absolutely need to survive like groceries, gas or public transportation money, medications, vitamins, kids necessities, dry cleaning and personal care. Toss unessential expenses like fast food and dinners out, magazine subscriptions, movies, and new clothes. This just a basic list, and will have to be personalized to fit the individual.
single mom budget plan
Eliminate stressors by prioritizing your most important expenses. Always pay your rent or mortgage first. At the end of the day, you will need somewhere to live. This is your most important bill. Don't jeopardize your credit score by falling behind on payments. Pay at least the minimum balance on your credit cards, if you can do more than that is great and will add a bump to your credit score. Don't go without electricity and running water. If you need more time for to pay your utilities, make arrangements as soon as possible. You do not want to be burdened with extra fees like disconnection and reconnection. Once all of these bills are paid, start focusing on your other bills.
When prioritizing your expenses, ask yourself these questions:
Will I be evicted?
What will happen to my credit report?
Is there a penalty or charge for late payment?
Will my utilities be turned off?
Will the remaining balance need to be paid in full if I miss a payment?
Will legal action be taken? And how soon? (repossession)
Make Your Guilty Pleasures Help You Pay or Save
Use Qapital for saving money towards future goals. For those who are not familiar with the app, it's used for goals setting like traveling, buying a house, or hobbies. It's perfect for people like me who have trouble saving money and I love that I'm saving without even knowing I'm saving money. You can also enable push notifications on your phone to be updated of your progress without signing into the app. Here's the step-by-step:
Set up your account, and all personal information (excluding ssn of course)
Add one or two checking accounts (no prepaid cards or accounts)
Choose a Goal (What do you want Most?)
Name your goal and how much you will need
If you are the only person achieving this goal, click "Set my goal".
After your members are added, you can now click set my goal and add a rule.
Choose rules that keep you accountable: Guilty Pleasure Rule
So, for every purchase you make at your chosen guilty pleasure, you will save your chosen amount. For example, for every cappuccino I buy at Starbucks, I will save $10. Considering I need my fix Monday through Friday, I'll be saving $50 a week! Yes, people, I need my java to get me through my mornings. I know my obsession with caffeine is a bit much, but if you were a single mom of 3, you'd completely understand.
Using applications like Qapital is great because you can set up ways to save that are most beneficial and not have to rely on memory or willpower. The other best part about Qapital is that once your checking account goes beneath a certain amount, it stop taking money for savings to prevent overdrafts.
Don't completely stress about your ability to save right now. Our main focus is getting out of debt, so you could apply that money saved from your guilty pleasure and put it towards your debt. Saving money along the way is an added bonus. However, having emergency funds as a single parent is a huge sanity saver, especially for unforeseeable events like job loss.
Okay so we've mapped out our escape plan, now it's time to take action. Be sure to write down your daily spending habitsto keep track of progress. Once it becomes a habit and remain firm in your lifestyle change you will see the benefits of your sacrifices.
Remember only spend money on things you truly need; I can not express this enough. In moments of temptation, refer back to your escape plan as I call it for a reminder of the outcome you are working towards achieving. You can also lean on family and friends for emotional support.
I'm Daisha Renee; single mama, foodie, and lover of yoga. Here on the blog, I love providing powerful solutions for overwhelmed single moms who struggle with balancing all the components of single motherhood. I would for you to come hang out with me in my Facebook Group. I can't wait to virtually meet you!