Raising a child is hard work! And when someone has to do it all by himself or herself, it can be a daunting task. It’s not an unknown fact that single parents have a tough time balancing work and home. Add finance to it, and situations are bound to be tough. Single parenting is becoming more prevalent today than ever. And with that, there are financial hurdles faced by single parents. Back in 2016, a survey revealed that the head of approximately 8.5 million United States households were single mothers. The count for single dads was 2.5 million.
Why do single parents face a financial crisis?
Are you wondering why single parents encounter financial hurdles? In the majority of situations, a single-parent household has small incomes. The amount is significantly less when compared with a two-parent counterpart. Single parents today have both part-time and full-time jobs. A survey in 2015 revealed that there were 92.6% custodial fathers and 91.7% custodial mothers in the U.S. They find it tough to pursue a full-time job without having some help at hand.
The single parent financial hurdle has always been present. The percentage of single parents’ households in American has tripled between the years 1960 and 2014. In 2018, divorce rates and the choice to stay single have further increased the count of single parents. In 2016, the U.S. Census Bureau has revealed more than 36.5% of houses headed by single mothers. It automatically increases the financial management for single parents. To make multiple ends meet, often single parents opt-in for numerous debts. And since the daily expenses are always growing, sometimes weak financial management makes them drown in consumer and credit card debts.
Debt consolidation can help
The process of debt consolidation for single parents has always been the best place to start, to clear off all the debts. The process is all about consolidating all the debts into one amount, applying a loan based on that amount and repaying the agency that decides to provide credit, in monthly installments, without fail.
However, the process of debt consolidation for single parents can be confusing. Usually, the questions that single parents mull on include:
- How to know the loan amount you should borrow?
- How can you repay your entire existing loan amount?
- What’s the immediate outcome after a high-interest debt gets paid off?
The process of debt consolidation is not as complicated as it seems to single parents. It’s a simple process which you can manage well. Want to know more on this? You can browse through websites like and others and decide if you’re going to reach out to any service provider.
Ways to manage debt for single parents
Have you decided to go the debt consolidation way? If yes, then as a single parent you need to follow the guidelines discussed as follows.
1. You need to know and understand your requirements well
It is the first step, and it’s very crucial. Start with talking to your ex-spouse about debt. Then quickly start by determining your financial conditions and the loan amount you need to apply. Also, add the amount that you already owe to someone or any institution. The total is the amount that you will have to borrow. It is a smart call to loan an amount which is slightly more than the overall debt. It is helpful when other unnoticed balances and bills were overlooked or suddenly pops up.
2. Calculate and fix the repayment time frame
Various financial institutions and companies have different repayment choices. For instances, some companies provide as much as 36 to 84 months of personal loans. Wondering the loan term that you should apply? It entirely depends on your monthly spending.
For instance, you might feel like consolidating $30,000 in a high debt interest rate, and you can pay as much as $400 on a monthly basis. So, the moment you have this understanding, you can get clear on the repayment time. Also, you will know the loan solutions that apply to you. Financial experts always suggest the use of a debt consolidation calculator to get clear on this.
3. Keep a tab on the fees
Some financial companies and institutions charge fees for applying for loans. This charge gets levied for proper loan administration. The costs can be as much as 5% of the entire loan amount. Additionally, you could also encounter prepayment charges. Here you have to pay a nominal fee if you want to clear up the debt before time. It’s always smart to find a company that doesn’t charge this fee from single parents.
4. Start to apply online
The application process might take up a couple of minutes online. Today, the majority of lenders have an online presence. Few service providers accept applications done via phone or mail as well. The majority of financial institutions and companies will request to provide your address, name and also the social security number. You might also need to answer a couple of questions concerning your housing debts and the monthly repayments. You also need to share on the amount you’re about to borrow. The process is simple and less time-consuming.
5. Get all your debts consolidated
As soon as the sanction gets done, consolidation starts. Generally, single parents don’t have to worry at all regarding repaying the debts all by them. Some lenders can repay the loans on single parents’ behalf. The monetary amount gets transferred to the creditors on the day after the loan amount was accepted.
6. Ensure that all your payments are monthly
It is a lengthy process. Here you have to start paying the lender every month. For single parents, this is also a straightforward process. They can generate bank withdrawals. With this, the amount that you owe will get deducted from your account on a daily basis. These withdrawals will keep happening until you have a zero balance.
You have the scope to trace this progress online. If the financial company or institution has a mobile app, you can download it and check the online progress as well. You’ll get a monthly statement that highlights your progress all this while.
As soon as you make the last payment, you are entirely done with all your debts. It is a time for celebration and starting your finances afresh. There are lessons you have learned which you need to put into action. It will help you not to fall into debt again. As a single parent, you can follow the above guidelines, to manage your debts better and finally repay it all.
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