Notes From A Single Parent: Like It or Not, You MUST Set a Budget!

Lynn Armitage
February 23, 2013

We’re in the middle of tax season, so money is on the brain. By a show of hands, how many of you single parents out there live within a budget? Uh-huh . . . just as I thought. Money is the root of much anxiety for us, so we’d rather not think about it, let alone plan for it, right?  We’re just happy to get through another day with enough money for gas and a hot meal for our kids at night.

We know from Census data that Native American children are more likely to be living in a single-parent household or with grandparents. While the fathers of these children should be helping to support them, we also know that this is not the case in many situations.

Lynn Armitage

Fortunately, by the grace of God, we’ve made it this far on an I-still-have-checks-so-I-can’t-be-broke mentality. It’s time to face a frightening aspect of single parenthood even more terrifying than cranky family law judges and lonely Saturday nights:

Living within our means.

Even though our lives have been turned upside down by divorce, and unwelcome change has been forced upon us in many ways, single parents don’t want to face the reality that money isn’t going to be flowing in like it used to when we were married. 

Yet we continue to spend and spend and spend . . .

Denial is a dangerous mindset, and one of the biggest mistakes single parents make, says Violet Woodhouse, a family law attorney in Southern California and foremost expert in the financial and tax aspects of divorce. “People have had a significant change in their relationship, but they don’t want to change anything else. They’re unwilling to adjust their lifestyle and spending patterns.”

As a result, many of us get into debt very quickly. We run up our credit cards and gobble up our savings. (“Oh, I’ll just reimburse that account later.” Sound familiar?) We even take out equity lines of credit on our house. A big—yet common—mistake, warns Woodhouse: “It’s scary when you start eating up your own wealth just to maintain your lifestyle.”

OK, we’ve licked our divorce wounds long enough and commiserated with friends over one too many expensive lattes. It’s time to get real about our new life and create a budget—priority No. 1 according to Woodhouse. “Get a handle on your expenses. Don’t underestimate them. And don’t forget about the small things,” such as auto repairs, medical costs and child care. Once you’ve added up all your expenses, subtract that from your income AFTER taxes. That number staring at you, however large or small, is what you have left every month to spend as you please.

Now, can you really afford another latte?

Then there’s child support. As discussed a few columns ago, child support can be difficult to collect on in the Native American community. Even outside the reservation, most single parents would be homeless without it. Even so, it’s a false sense of security. If the ex-husband lost his job or became disabled, the checks would stop immediately. Woodhouse says the sooner we can become less dependent on child support, the better. “That level of dependency puts you at risk . . . whenever you’re financially connected to the ex, you’re at risk.”

As for 401Ks and investments, Woodhouse has these words of wisdom: “Don’t take care of the future until you take care of today.” Once you have six months of monthly expenses saved up, she says, only then should you look toward the future and consider investing.

Violet Woodhouse is the author of “Divorce &  Money: How To Make The Best Financial Decisions During Divorce.” She can be reached at 949.640.8861 or by e-mail: [email protected].

Lynn Armitage is a freelance writer in Northern California. She also writes the “Spirit of Enterprise” series for ICTMN.  She is an enrolled member of the Oneida Tribe of Indians of Wisconsin.