How Single Parents Can Juggle Retirement Savings, Too

Being a single parent is hard work. It's also expensive, with the U.S. Department of Agriculture recently reporting that the estimated cost of raising a child from birth through age 17 is $233,610. That comes out to nearly $14,000 a year.

If you're a single parent with one income, paying for your children's clothing, food, education, and activities might not only be consuming most of your money, but most of your time, too. At the end of another long day, you might think that it's simply too difficult to plan or save for your own retirement.

Fortunately, this isn't true. Yes, saving for retirement will be more challenging for single parents. But it can be done, and the steps to start saving and investing for retirement aren't overly difficult.

Here are five moves single parents should make today to prepare for their future retirement.

1. Make a budget

Nothing is more important than creating a household budget, and making one is simpler than you think. Once you have a budget, you'll be able to figure out how much money you can allocate to retirement savings each month.

First, write down how much money you bring into your household every month. Next, list how much you spend. Start with your fixed expenses, which includes everything from your monthly mortgage payment to your insurance costs. Then, calculate an average cost for expenses that fluctuate. These can include utility bills, transportation, clothing, groceries, and entertainment. Don't forget to include intermittent expenses, such as haircuts and car maintenance bills, which you might think of in annual terms — find the average so you can estimate a monthly amount. Once you have these figures, you'll know how much wiggle room is left each month to put toward your retirement.

Compiling a budget can also help you make positive changes to your overall spending habits. Maybe you'll find that you're spending more money than you're bringing in. You might then make a few small adjustments — such as eating out less, cutting the cable cord, or dropping a gym membership — that will free up money each month.

2. Start small and build an emergency fund

After making a budget, set aside at least some of your leftover money in the month to build an emergency fund. You'll use this fund to pay for any unexpected financial emergencies (such as a broken water heater) with cash instead of charging repairs to a credit card. The key to saving for retirement as a single parent is to avoid building debt, and nothing can derail your savings goals faster than high interest credit card debt. By having that emergency fund, you'll be far less likely to add big bills to your credit cards.

You might not have much money to devote to an emergency fund. That's OK. Even if you can only save $50 a month, do it. By the end of a year, you'll have $600. That may not be a huge amount, but it's a start. Your ultimate goal should be to build an emergency fund that can cover daily living expenses for three to six months. (See also: Change Jars and 8 Other Clever Ways to Build an Emergency Fund)

3. Save in tax-advantaged investment vehicles

As a single parent, it's important to keep as many of your dollars in your household as possible. Tax-advantaged savings vehicles can help you do this.

If your employer offers a 401(k) plan, take advantage of it. Contributions to your 401(k) are made with pretax dollars from each paycheck. This means that when you file your taxes for the year, the IRS will treat your income as smaller than it actually was. This will help lower your tax burden each year while simultaneously growing your retirement.

You can also invest in a traditional IRA if you don't have access to a 401(k). Contributions to a traditional IRA are also made with pretax dollars, which again, will lower your taxable income.

4. Prioritize retirement over college savings

Like most parents, you probably want to give your child as much financial help as you can to get them into a good college. But too many parents save for their children's education while skimping on building their own retirement fund. This is a mistake.

Remember, your kids have options when it comes to their education. They can attend a community college or less-expensive university, seek financial aid, or work their way through school. They might not be able to attend their dream school, but that doesn't mean they can't get a solid college education.

You won't have as many options when it's time to leave the working world. You certainly don't want a retirement in which you're struggling to pay your bills, so you need to avoid the impulse to prioritize your child's college fund over your own retirement savings. (See also: Why Saving Too Much Money for a College Fund Is a Bad Idea)

5. Resist the temptation to overspend

As a single parent, it can be tempting to overspend on gifts and expensive vacations in an effort to make up for whatever challenges you and your children face. The problem is, this kind of emotional overspending can wreck your monthly budget. And when money gets tight, it's your retirement savings that often suffers.

It's OK to treat your children, of course. But make sure these little rewards don't come at the expense of building a retirement fund.

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