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Single Parents and Managing Debt
If you’re a single parent you’ll already be aware of how difficult it can be to bring your children up alone. Bringing up a child from birth to 21 now costs more that £180,000 according to debt advice charity CreditAction (2007) - a figure that doesn’t get any lower if you have to do it alone.
But don’t despair - there are support systems available, as well as practical steps that you can take to ensure that you don’t fall into debt.
Budget
Being able to write a realistic budget and stick to it is one of the most important skills to learn in life. Budgeting means that you’re in control of your finances and that allows you to better plan for future events like upcoming birthdays or Christmas.
Check your benefits
Millions of pounds in benefits go unclaimed every year so make sure that you’re claiming everything that you’re eligible for. There is a great website that allows you to check what you should be receiving (www.entitledto.co.uk/). Even if you have a job you could still be entitled to benefits and if your kids have finished their GCSEs but are still in full time education, check to see if they qualify for an Education Maintenance Allowance of up to £30 a week.
Switch it up
Switching things like your broadband connection, home phone, gas and electricity can save hundreds of pounds each year. Many people stay on outdated and expensive packages because they think that switching takes time and hassle. But it really is a simple process and you can end up with not only a cheaper, but also a much better product.
Since the best deals invariably go out to new customers, make a note of when your contracts are up and do a new comparison to see if you’re still getting the best value available.
Go green
Making small changes around the house like switching your thermostat down by one degree, putting draft excluders down or getting a water meter can cut loads off your energy bills as well as helping the planet. Click here to read our article on how you can save up to £860 a year by changing your home habits.
Clear the debt
It is a good idea to have some savings, but if you’re scrimping to put something into a savings account each month but paying out loads in interest for loans and credit cards then you should really use your savings to pay off your debt. No matter what you earn on you savings account it will always be dwarfed by what you have to pay in interest to your creditors. Once your debts are paid off you can start to save without losing out.
Avoid credit
Avoid taking out any form of credit unless you absolutely have no choice because you could end up in further financial difficulties once the interest starts to add up.
Choose free days out
Many parents feel that they have to spend £100 on a day out at Alton Towers for the kids, but there are always loads of cheap and free options that your children will enjoy too. Even something as simple as a picnic in the park is loads of fun and you can check out your local council website for details of free days out and upcoming special offers to save money too. If you’re determined to do the expensive stuff too though, avoid buying tickets on the day - look for online offers on websites like LastMinute.com or in your local supermarket.
Consolidation is a last option
If you already have debts for which you’re paying high rates of interest such as credit cards and store cards you could consider taking out a low interest loan to pay them off, saving yourself money on the interest. Try to go for an unsecured loan though, as you shouldn’t risk your home, and make sure you borrow only what you need to clear your existing debts - don’t be tempted to take an extra £1,000 for a holiday or anything else you don’t really need.
If you really can’t cope, seek help from the Citizens Advice Bureau, National Debtline or the Consumer Credit Counselling Service (see useful links). They will be able to talk to your creditors and hopefully agree lower repayments that you will be able to afford. This will stop you being at risk of losing your home or property and reduce the stress of having to face angry letters in the post, demanding that you pay up.
Don’t go it alone
Gingerbread is an organisation that provides help and support for the 1.8 million single parents and their children in England and Wales. As divorce and cohabiting have become more common, so have support groups for single parents. Gingerbread offers not only practical advice on how to cope with life as a single parent but also has support groups up and down the country allowing you to get in touch with people in a similar situation to yourself. See useful links for details (www.gingerbread.org.uk).
