How Single Moms Can Save Money on One Income

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When I first became a single parent, I didn’t know much about saving money, and I certainly didn’t know anything about saving money on one income.

I didn’t know how I’d make ends meet each month much less save money.

But using the techniques below I’ve been debt-free for years now (except for my house, which is debatable as a “good” loan to have – more on that below.)

Here’s how I save money on one income.

4 Money-Saving Tips for Single MOMS

For years I’ve been using the following four primary methods:

Auto Pay for Fixed Expenses
Multiple Savings Accounts
Zero Based Budgeting
Pay Cash for Everything

Let’s dive in!

Money Saving Tip #1: automatic payments for fixed expenses

Saving money as a single mom is so overwhelming, especially when the bills keep coming in.

One way to combat this is to have the necessities auto-paid. Even though I’m debt-free today, I still follow this approach for a couple of reasons:

You never see this money, so you can’t spend it. Once your paycheck is deposited into your bank account, this money is set aside into another sub-account (more on this below) or the bills are automatically paid (more on this below).
You don’t have to worry about paying these necessary bills, so your bills are never late, and thus you never have late fees.

It can be so overwhelming as a single parent to have to do all the things. Setting your bills on autopilot is one worry off your plate.

Below are the bills you should have on auto-pay. You can’t live without them. Why not have them paid automatically and forget about them?

Fixed Expenses

House payment.

This can easily be drafted by your bank, call your mortgage lender to set it up for you.

Bonus: Make an extra house payment each year without even realizing it. When I received a paycheck bi-weekly, it was just as easy for me to have half of my house payment moved to a separate savings account as soon as my paycheck was deposited. Then my house payment was automatically withdrawn from that savings account, not my checking account. Your bank can easily set this up for you.

2. Gas, Electric, Water, Trash, House Alarm, Cell Phone, Charity. These can all be set up to be paid either through your checking account or through a credit card. Check out which one makes sense for you.

Sometimes there are fees if you set it up by credit card.
If you have credit card debt and cannot pay your credit card off completely each month, don’t go this route. I pay off my credit card each month, no exceptions.
One advantage of setting these bills up through your credit card is your bill is due just once during the month for all your bills. You can pay the full amount at the end of the month after you have received all your paychecks for the month.
Another advantage of setting your bills onto your credit card is most credit cards have a cash back program, so you earn points or money back just for paying your bills through them.

Money Saving Tip #2: multiple savings accounts

Most banks will allow you to have as many savings accounts as you want with as little as $5 as the balance. Separate savings accounts is a great way to keep saving money as a single mom for variable expenses as well.

Different Types

Here are some different saving accounts you can set up today to begin saving money.

House payment. As mentioned earlier, I have one for my house payment. I never look at this one. It is automatic, and I never touch it because I can never be without a home.
Escrow Account. Have a certain amount of money automatically transferred into this savings account each pay period for the escrow on your home. Escrow is your house insurance and your real estate taxes. It is cheaper for you, in the long run, to not roll these up in your home loan. If you do, then you will pay more on your loan in interest. However, you must qualify with your lender, and you are responsible for lump sum payments each year for these two bills, so make sure you do not touch this money. You should weigh the pros and cons.
Christmas. Saving money as a single mom for Christmas or birthdays or any holiday can be a real struggle. But you can set aside different savings account for anything! It doesn’t need to be much. It adds up! Check with your bank or credit union. Most offer Christmas club accounts, and they mail you a check or automatically transfer the money to your checking account in November.

Money Saving Tip #3: Zero Based Budgeting

Okay, here’s the biggie.

To find your overflow, and start saving money as a single mom, you need to learn zero-based budgeting. You don’t have to follow this exact template. It’s just an example of what worked for me. But learning this concept is critical.

Zero-based budgeting means at the beginning of each month you write down your income and begin subtracting all your expenses until your bottom line is zero. If you have money left over, that’s your savings.

It means being aware where every penny of your income goes.

You can use apps to track your spending for you.

However, I think it is good to spend a few minutes at the beginning of each month planning out your expenses and understanding your numbers.

Here are some questions to ask yourself.

Where is there a trend?
Is the cell bill increasing now that your eldest child has a phone? Maybe you need to look at restricting their usage.
Where can you cut back? Maybe groceries are higher than expected and you can try shopping at a discount store or online for a couple of months to curb spontaneous shopping.
How much are you saving or paying towards your debt? Maybe it’s more than you thought. It can be encouraging and empowering to take charge of your money and not turn a blind eye because you don’t know what is happening.
Now that I am on one income, where are my opportunities to begin saving money as a single mom? Where can I trim expenses? Do I really need the cable bill?

Example Spreadsheet

Here is an example of the spreadsheet I used for 10 years and how I used the spreadsheet.

Get a copy of my spreadsheet by clicking on the image and modify it for yourself.

budget example for saving money as a single mom

The spreadsheet is split into two Pay Periods. Feel free to modify this for more or fewer pay periods and add all the expenses you can think of.

First, enter your fixed expenses in the pay period you will pay for them in. The first month you do this, you may want to annotate the date your bills are due.

For example, if you will be implementing the house payment strategy from above, then you will have an equal amount in the house payment box for both pay periods.

If not, then you will have a big chunk for one pay period and nothing on the other. This means your other expenses will probably need to fall in the other pay period.

Note: even if you decide not to make an additional payment each month to your house payment, you can still split up the amount you set aside so that one pay period doesn’t feel so draining. Having a separate savings account is helpful for this.

If you are using your credit card to streamline your payment for anything, then you will want to zero out those lines and enter the amount due in the credit card line.

Total everything in Total Expenses.

For income, include all streams of income: main job, and any side hustle jobs you may have.

Money saving tip: do not count on your child support as a steady income when figuring your budget. When it comes in, you can add it to the income. Very rare is the single mother who receives a regular child support check throughout their child’s life. It’s best not to depend on it completely.

Zero Bottom Line

Income should automatically subtract your expenses, leaving your difference. If the amount in “difference” is positive, it’s not “spend money.”

Here is where the zero-based budgeting comes into play. And where our opportunities for saving money come in. We want the bottom line to equal zero.

Above you should have identified all areas in your life where you need money. Those are your fixed and variable expenses. The difference or overflow goes into one of 3 places:

Savings to build up an emergency fund. This is especially important as a single parent. We left the savings line empty earlier. You can fill this in with the remainder now.
Pay off credit card debt. Add the remaining of this amount here. You can make more than one payment to your credit card. You don’t need to hold onto this money. Zero out your budget and apply this amount to your credit card.
Pay additional to a car loan or any other loan you have.

If you already have these filled in and are looking good, that means you can begin to breathe. Where do you want your extra money to go?

Children’s College Education
Pay off your Home Loan. There are two schools of thoughts on this. I hate all kinds of debt and I strive to pay mine off.
Additional Savings account for Vacation Fund

What if My Difference is Negative?

What if my difference is negative and I don’t have enough money for the bills much less saving money as a single mom? Using the cash envelope system below can get you on track.

Money Saving Tip #4: Cash Envelope System

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When I was first trying to get out of debt and save money, I exclusively used the cash envelope system. This is a popular system taught by Dave Ramsey from Financial Peace University. I highly recommend taking this course if you’re struggling with saving money as a single mom.

Or a more affordable option (and what I did) was read his book, “Total Money Makeover.”

Basic Premise:

For any expense that cannot be qualified as a fixed expense or that does not come from a company with a bill attached to it, gets its own envelope and you pay for it all using cash. These kinds of expenses include entertainment, groceries, gasoline, clothing, haircuts, etc.

Once you get used to this system, it’s excellent. Allow yourself a couple of months to get a system down. It may not feel 100% natural at first.

As a result, I’ve never used an ATM in my life. Whenever I receive my PIN in the mail from the bank, I shred it immediately. I don’t know my PIN to use it with the cashier. I have no way to extract cash using my debit card.

Not knowing my PIN prevents spontaneous purchases.

Each pay period you withdraw the amount on your spreadsheet for groceries, for example, and put in the groceries envelope. You use only that much money for groceries that pay period. You don’t use the credit card because you have already looked at your full income and expenses for the month and zeroed it out.

While going through your budget if you’re short on a fixed bill, such as your house payment, it comes out of entertainment or groceries. You go without entertainment or cable for a while. Or you have less of a groceries budget that month.

On the other hand, some months aren’t so bad, and you have extra cash in your grocery budget. When that happens, you can move that cash to your entertainment envelope.

Following Money Saving Tips every day

Live like this for a year or two. Pay off your debt, and this whole system becomes second nature. It doesn’t feel like you are living paycheck to paycheck. Because you can see how much money you have, and you can see yourself winning in your bank balance each month.

Once you get comfortable with your monthly budget, then it becomes easy to adapt to your own methods. You can find places in your daily life to save money that you may be doing now without even knowing it. Start looking, and you’ll be surprised what you may find.

Then you can teach your children a slimmed down version of this exact same budget!

Consider creating yearly goals to keep yourself on track. Review them each month when you sit down to look at your budget. Check out how to incorporate your money and goals here.

Money Saving Tips for Single Moms is part of a 7-month Single Moms series titles “Secrets of a Successful Life” by Single Mom Bloggers. Each month, multiple amazing single mom bloggers will be writing on different topics. I pray you find encouragement, acceptance, and belonging amongst these brave women!

How Single Moms Can Save Money on One Income

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