3 Tips to Help Single Moms Get Out of Debt 

It has never been more difficult to be a single mom than it is right now… 

The National Debt Advisory (NDA) found that 70% of women ran out of money before the end of the month. And 65% of women experienced a reduced income while taking on more domestic responsibility during the pandemic. 

Single moms had to face the challenges of working from home, earning a reduced salary while still paying living expenses as well as any monthly debt repayments. And you still need to be the superstar mom to your children. That’s not easy. Especially if you have unbearable amounts of debt.

Dealing with a lot of debt comes with additional stress, anxiety and fear. Sometimes it can feel like you’ve lost control of finances. If you take action and actively work on improving your financial situation, you will get out of debt sooner than you think. 

Girl, if you’re drowning in debt, we are here to help you. We have helped thousands of people get out of debt. You don’t have to be enslaved by debt. It’s time to look your personal finances in the eye and slay the debt beast once and for all. Now it’s your time to shine. 

1. Create a monthly budget 

The first step to getting out of debt is by creating a budget. Creating a budget tells you how much money you can pay towards your debt every month. 

How do you create a simple budget for yourself? 

1. List all your monthly expenses including your debt repayments. 
2. List your monthly income. 
3. Subtract your monthly income from your expenses. 

The goal is to ensure all your monthly expenses are covered and still have money available for savings and investments. 

Creating a budget is as simple as that. The trick is to stick to your budget every month and to track your expenses as you make payments.

Once you know how much money you have to pay towards your debt, you can create a debt repayment plan. 

2. Create a debt repayment plan

The debt snowball method

The debt snowball is one of the most effective DIY methods to help you get out of debt.

This method helps you pay off all your credit card debt and loans with the lowest balance first. The snowball method has become popular because you get rewarded psychologically and emotionally every time you eliminate an account. 

How does the snowball method work?

1. List all your debt accounts from the lowest to the highest balance. 
2. Continue making the minimum repayments on all your debt accounts. And add any extra money you have towards the account with the smallest balance. 
3. Ensure that you pay as much as you can towards the account with the smallest balance. 
4. Once that account has been paid off, use that same repayment amount and pay off the next account on your list. 
5. Repeat this process until you’ve paid off all your debt accounts. 

By starting with the account with the smallest balance first, you’ll start building momentum and pay off all your other accounts much quicker. 

Avoid unnecessary spending

Now that you know how much you’re paying towards your debt each month and you have a debt repayment plan, it’s crucial that you cut back on other areas. 

While you were creating your budget you may have realized that you’re spending a little too much on eating out and entertainment. Or perhaps you realized that you’re spending too much on your children. You could easily cut back on spending in these areas. 

Make it a priority to think about what you’re buying before you commit to the purchase. You want to focus your spending on the things you need and avoid spending your money on the things you want.

3. Seek out professional help 

If you’re completely overwhelmed by debt and truly believe that you can’t dig yourself out of debt on your own terms, you may need professional help. 

For example:

• You have a large medical bill that you can’t pay right away. 
• Your credit cards and personal loans are unmanageable on your own. 
• You have a poor credit score which means you’ll have higher interest on all your debt accounts, making it harder to pay off. 

A debt counsellor will help you create a debt repayment plan and consolidate your debt. By consolidating your debt you’ll only have to make a single monthly debt repayment at a lower interest rate, making your debt more affordable. 

Debt counselling helps you reduce your monthly debt repayment so that you have more money available for other monthly expenses, like child care, rent/mortgage, vehicle finance, groceries etc. 

If you like more information about debt counselling click here. 

Alternatively you can fill in the form below and one of our consultants will contact you shortly.