Life as a single parent is full-on. Squeezing in a moment for yourself feels like a luxury, and getting a grip on personal finances might seem like an impossible dream. In Ireland, this is the day-to-day reality for one in five households[1].

While we can’t help with the parenting duties, there are a few things we can help with on the financial side of raising a family – plus, we’ve put together a few more handy guidelines for you to explore. So, here are some practical things you can do as a single parent to try and improve your financial wellbeing for you and your kids.

Make a budget

Kick things off by taking a close look at how much money is coming in and going out of your account every month. Following a budget is a clever way to keep your spending in check and manage expenses like childcare and household bills. A handy tip is to set up your direct debits to go out on payday. This way, you’ll know exactly what you’ve got left for the month.

Use the 50/30/20 rule as a guide for your budget. It’s a simple formula that splits your income into three categories: 50% for the must-haves (like rent, food, and keeping the lights on), 30% for the nice-to-haves (maybe a little treat for you and the kids), and 20% for saving or chipping away at any debts. It’s a practical method that makes sure you’re covering the essentials, while still finding a little room for fun and future savings.

If you’re managing on a single income, your budget might highlight areas where you need to cut back a little. Maybe you can spend less on groceries by meal prepping or switching to budget-friendly shops. Also, check if you can save money on your energy bills by switching to a cheaper provider. Small adjustments like these can lead to significant savings over time.

Set financial goals

Whether it’s saving for your child’s education, a dream holiday to Disneyland, or finally getting that much-needed home renovation done, having clear financial goals can motivate you to save and help you stay on track.

Identifying your goal is the first step. The next? Creating a savings plan to help you get there. Let’s say you want to put aside money for their college fund. If you receive children’s allowance, you could make the most of this monthly payment by putting it aside for the future.

Think about it: if you can afford to put away that €140 every month, by the time they’re 18 you could have €30,240. Every bit you save now is a step closer to your goal, whether that’s covering tuition fees, books, or even student accommodation.

Build an emergency fund

Call it a safety net, a rainy-day fund or a financial cushion – the name isn’t what matters. What’s important is that you have one.

Putting money away for emergencies reduces your worries during financial difficulties, whether it’s for a one-time surprise expense like a broken boiler, or for something more sustained such as covering your bills through a period of unemployment.

A general guideline is to save three to six months of your take-home pay for times like this. As a single parent, aiming for the higher end of that range might offer extra peace of mind, if you can manage it. That might sound absolutely impossible, but don’t worry – every little helps. Start small and build up your fund over time. You’ll get there!

Create long-term plans for the future

Being a single parent means your days are packed, and thinking about the future often takes a back seat. But making plans for the long term is really important for you and your family.

Start saving for retirement

Saving for retirement might not be on your radar right now, what with all the everyday expenses and bills to pay. But starting early can really make a difference.

It might seem tough to think about a pension now, but if you are fortunate enough to be able to support yourself in retirement, you won’t need to worry about depending on your kids financially down the line.

So, where to start if you haven’t already? Look at retirement options like a company pension or personal retirement savings account (PRSA) and try to put a small amount away regularly.

You can use this pension calculator to figure out just how much you should be saving now to aim for a comfortable retirement later. That way, when your kids are grown and living their own adventures, you’re all set to enjoy your golden years.

Invest extra income

Investing might sound intimidating, especially if you’re new to it or if your budget seems too tight. But it isn’t just for the wealthy. Yes, the value of your investment may go down as well as up, but investing over a longer period can help you mitigate that risk and build a better future for your family.

You don’t have to start big.

Small, consistent investments could grow over time, much like your retirement fund. That’s why investing could do more for your money than just keeping it in a savings account.

First things first, though: make sure you’re in a good financial position. Clear any high-interest debts and set up your emergency fund. Then, if you find yourself with money left over at the end of each month, you could invest it.

Investing some of your children’s allowance could be a smart move. Instead of simply saving the €140 monthly payment in a bank or credit union – where it would add up to €30,240 over 18 years – investing this money with a tool like Smart Invest could potentially turn this into a much larger nest egg for your kid’s future. 

It’s not without risk (you could lose some or all of your money) but it could well be a sound financial decision if you can afford it.

Smart Invest is provided by Irish Life Financial Services and Irish Life Assurance and is available to residents in Ireland aged 18 to 59.

Take out financial protection

Thinking about the “what ifs” isn’t fun, but you won’t regret having some financial security in place if the unexpected happens.

Do I need life insurance as a single parent?

Short answer: yes. Life insurance might seem like an unnecessary expense, but it’s actually the cornerstone of a solid financial plan for anyone, especially single parents.

Think of it as a safety net for your kids. If anything were to happen to you, life insurance could cover essential expenses like living costs, education, and even those future milestones you’re dreaming of for them.

What is income protection?

Income protection is a type of life insurance that does not pay out when you die. If you’re unable to work because of illness or injury while employed, income protection insurance kicks in to cover a portion of your lost earnings. This means you can focus on getting better without stressing over how the bills will get paid.

If you’re new to insurance, you might have a heap of questions, like what insurance is right for you. We’ve answered some of the most common questions people have about life insurance before, but you can also talk to a financial advisor for expert advice.

And if you’ve already got insurance, check in with your advisor to see if your coverage still fits your current circumstances. Maybe there’s a new addition to your family or your partner is no longer in the picture. Things like this can change what you need from your insurance. A quick review can help you make sure you’re not paying too much for what you don’t need or that you’re still covered for everything important.

Update or make a will

It’s easy to put off making a will, waiting for a moment that feels “right” or until it seems absolutely necessary. And while there’s no legal requirement to have one, it’s well worth taking the time to make one today, especially if you’re the sole carer.

Creating a will gives you the chance to make clear decisions about who will look after your children if you’re no longer able to, along with how you want your assets to be distributed to support them.

Make the most of single parent benefits

In Ireland, there are a couple of benefits for single parents that could leave you with a bit of extra money in your bank account.

As a single parent, you might qualify for the Single Person Child Carer Credit (SPCCC) which can reduce the tax you pay. From 2024, this could put €1,750 back into your budget each year until the year your child turns 18.

And there’s more good news: you might also qualify for the One-Parent Family Payment (OFP). Whether you’re a mum or a dad flying solo, this payment is there to help you manage the financial side of raising kids on your own.

Take advantage of the National Childcare Scheme

Childcare is one of the biggest expenses for single parents. The National Childcare Scheme (NCS) offers financial support to help with this. If you’re raising kids on a single income, this scheme can make a big difference. It provides subsidies for kids from 24 weeks old up to 15 years. This money goes straight to approved childcare providers that are part of the scheme, reducing what you pay each month.

To apply, you’ll need to check your eligibility and then submit an application online. This support is on top of any children’s allowance you receive, playing a big role in how you handle your money as a single parent.

Please note: Irish Life Financial Services cannot provide advice on budgeting, will planning, tax or government schemes (including eligibility).

Take care of your mental health

This last one is perhaps the most important. Managing your family’s finances and planning ahead are key when you’re doing it all yourself. But if your head’s not in the right place, these things get harder.

Feeling stressed can cloud your judgment and make it tougher to make smart money decisions or stick to your budget. When there’s so much going on, it’s easy to forget about looking after yourself. But taking a little time out is so important for your emotional and financial wellbeing.

And remember you don’t have to handle everything on your own. Chatting with friends, family, or getting some professional advice when things feel too heavy can be a game-changer.

 

[1] Census 2022 Results - Households, Families, and Childcare | Central Statistics Office - 31 August 2023