THE BLOG
06/29/2016 12:26 pm ET Updated Dec 06, 2017

The Personal Finance Index Card for Single Moms

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No one told me in deep detail how to invest my money or save for anything with discipline. And when I found myself as a single mom, I knew I had to get smart on money real fast.

Handling finances as a single mom (or any single parent, really) doesn't have to be complex. In fact, all you need to remember about money can fit on a 3 x 5 index card. Helaine Olen and Harold Pollack cover very simple methods to get smart with money in their personal finance book, The Index Card: Why Personal Finance Doesn't Have to be Complicated.

I really enjoyed the book, but I got the impression that it may have been written for a typical family (i.e. husband, wife, kids.). So, I crafted an index card that could quell the money concerns of single moms.

Keeping a simplified, disciplined money plan on an index card could help you meet your financial goals in no time.

1. Don't be embarrassed by how little you contribute to your 401k
For a traditional family, contributing 10% into a 401k could br easy. But for a solo parent, 10% could mean eating ramen noodles for a while. So, put in as much as you reasonably can.

And don't feel embarrassed because you cannot afford more. Sure you want to contribute more, especially when markets are trending high. But if it's just not in your cards on a solo budget, don't pull your teeth out over it. Put in what you can and increase your contribution rate as your income improves.

2. Pay off small debts first
I'm a huge proponent of Dave Ramsey's snow balling method to debt reduction.This builds the psychological discipline of debt management once you've actually paid off your first small debt. Give it a try. I promise you: it WORKS!

3. Save your child support/alimony
Be honest. Are you using the supportive income for extra things like vacations or gifts or is it assisting in household bills? If for bills, increase your employment income. If for leisure, put almost all of the supportive income into savings! A lot of times, single parents will try to overcompensate in extra stuff especially when there's a reliable supporting income in place. And it's very easy to not track that spending. Challenge yourself to save most of the child support/alimony and you will have a very nice savings cushion in no time for your family.

4. Become thrift freak
There's no ROI on a $80 blouse. That $80 could pay my cell phone bill for two months! Shave your clothing bill tremendously by sticking to thrift stores. And if you have teenagers who gripe about second-hand clothing, show them the financial difference in savings from getting cute finds at the Goodwill to shopping at the mall. And if they reach their hand out for the money, tell them to get a job.

5. Purchase an economic home

Purchase a home based on economic soundness, not just on what you want. What you want could have you up to your chin in debt. Of course, we all want a large yard and chandeliers hanging from the ceilings, but the important question is does it accommodate the needs of your family? The 2200 square foot beauty may be want you want but the humble 1600 square foot rancher 5 houses down is what you need. Of course you deserve a lovely home, but base your purchase decision on your wallet, not your heart.

6. Live off of $120 until next paycheck
That's my personal goal for me and my family. That would mean our personal spending would be less than $240 a month!

Of course, you may find $120 to be unrealistic. Which is fine, but the point is to challenge yourself to live within less than your means. I know your family wants to enjoy some things at least once a month. But find a way to trim spending elsewhere until the next pay check. When you find a comfortable amount, the extra cash remaining accumulates quicker in your savings.

7. Refinance your car and credit cards
Refinancing your car loan and credit cards could be the difference between several hundreds of dollars staying in your pocket. Going from 23% interest in your credit card to 18% could be the difference between a few bucks to $20-40 less in monthly payments. And going from 6.5% to 2.1% could mean paying over $100 less in car payments.

8. Invest with caution
Investing your money is necessary for growth, but do so knowing the difference between a REIT and a ETF. If you're not versed with investment lingo, make an appointment at your bank to pick a financial planner's brain about the many options to grow money. A good place to start is 529 plans, moderate-risk mutual funds, and CDs.

9. Place a limit on gifts

I remember one time I went into debt for 2 months trying to entertain my child on her birthday! Never again! Put a cap on the number of gifts your children (and other folks) receive. It will not only keep your wallet happy but it will teach them a valuable lesson in humility and gratitude.

10. Give back

Single moms tend to get so caught up in everything we think is wrong that it becomes easy to forget the less fortunate. In the mist of planning your financial future, never loose sight of being charitable. Giving your used goods, time, or services to the less fortunate could make you far more appreciative of your life, regardless how much of a struggle it feels like.

BONUS: Be civil with the ex

The more civil the relationship is, the more beneficial it is to the children. And you.
Asking the ex for favors won't always feel like you're getting your teeth scraped. I know my ex routinely purchased their school clothes and shoes, elevating the task off my shoulders. And I know our respectable relationship helped with that. Of course, you'd want to get along with your ex either way, but civility could have money perks!

ANOTHER BONUS: Find cheaper daycare

Many centers offer military and multiple-child discounts. So if you feel you're being dragged by the coat tails in daycare fees, consider looking elsewhere. Daycare is one of the most expensive costs to raising a child. And whatever you do, always conduct background checks and ask other parents about the center's service before signing that dotted line.

Monica is a freelance writer living in Virginia with her two little girls. She currently contributes to The Washington Post, covering topics on parenting and the single life. For more info, catch her at arichsinglemom.com.