Oct 23, 2018

How Can Single Parents Stay Financially Stable by Keeping Off Troublesome Debts?

The trouble with single parenthood in the first place is the burden of financial management from a single source of income. If this one thing can be managed carefully with planning, then the rest of the challenges of single parenthood can be focused on and worked on gradually. Hence, you need to start from financial planning against your sole income. And this can be done when the sketch of what to do, and what to avoid gets clear before you.
Things to do as a single parent for financial stability
When you have the required amount of funds to keep up with the standards of a basic lifestyle and meet necessities, then you are stable financially. For this to happen, you must do the following:
·         Stick to a logical budget every month where there is no room for unnecessary expenses and extravagance
·         Save every month to build a good fund
·         Make another fund with your savings for sudden expenses and emergencies
·         Maintain a medical emergency fund and invest in medical insurance
·         Invest bit by bit slowly in systematic investment schemes to build wealth
·         Stay out of debt and try to close all debts as soon as possible

Things a single parent must avoid to maintain financial stability
There are again a lot of things single parents must avoid to maintain the financial stability:
·         Minimize the use of credit cards and use one only when you are totally compelled to
·         Never go over budget unless in an emergency
·         Avoid high-interest rate payday loans and rather depend on your emergency funds
·         When you cannot manage debt, then do not linger on with ongoing late payments and defaults. Rather try and find a solution as soon as possible to save hampering of your credit rating.

Getting financially stable requires you to
Financial stability depends on concrete planning and then sticking to that plan. And as the single parent with lots of responsibilities (almost double the responsibility a normal parent has), you must stick to your budget, cut down on unnecessary expenses, avoid extravagant expenses, control temptations for things your budget and lifestyle does not allow, and try to focus on increasing your savings and earning both.

Debt is the primary bloodsucker
One of the main challenges which come the way of single parents in retaining money, making savings, and leading a peaceful, stable life is debt. It has been seen that single parents are most susceptible to the burden of debt which gets unmanageable and troublesome with time.

When you start as a single parent, you try to make sufficient money to support the child and household. But with time, as the child grows, and the expenses on raising the kid also increases while your earnings do not, then you get into the financial pressure gradually.

One sudden financial stress due to a big expense or emergency instigates you to use the credit card or take a sudden payday loan, and there it all starts. Sometimes the single parent also inherits some debt from the divorce or from ancestors. Whatever the reason you get into debt, it really suffocates you when you struggle to pay the loan EMIs and yet save something.

The biggest problem you get from unmanageable loans
When debts go out of control, and you cannot manage to pay them off on time or to pay full,then things get messy. Some of the problems you get from such unmanageable debts are:
·         You cannot save any money after meeting household expenses and then loan EMIs
·         Your emergency funds and savings get used up to pay the debt
·         You always run on the edge and never have any extra money to meet sudden expenses and always fall short of funds
·         You often pay late for the loan EMIs and other EMIs like an insurance premium, house rent, school fees, etc.
·         Due to late payments, you always get penalized, and more of such late payments get penalties accrued on loan accounts
·         Continued late payments may gradually transform into non-payments when you cannot continue this way and pressure increases
·         Late payments and non-payments affect your credit history and credit rating
·         With an affected credit rating you become non-eligible for future loans, mortgages, etc., and your creditworthiness and reputation get affected badly.
·         You start getting calls from creditors for recovery of missed EMIs

In such condition, no one can stay happy and peaceful. You ought to lose your mental sanity and happiness of life when getting into such dangerous financial conditions. And that is why before debts start strangling you to bankruptcy, you must fight back.

How to fight debt with debt consolidation
One very good way to fight debt is through the use of a debt consolidation loan. When you take a big amount of loan from a trusted source at a low rate of interest to pay them back in small EMIs, then you may use that amount to pay off all present loans that are giving you trouble. Such payments involve pre-closure charges and penalty payments too. And that is why when applying for such debt consolidation loan, you must calculate all the money you need to get off from problematic including penalties.

How to get a debt consolidation loan?
To get a debt consolidation loan, you need the following:
·         Healthy credit score of around 700
·         Stable income with proof of employment which sows you employed for minimum 6 months at the same place
·         Proof of residence with same address for at least 6 months
If you can furnish them, then you may apply for a debt consolidation loan immediately. Through trusted sources like https://www.libertylending.com/, this can be done online only. From application to approval everything gets completed online, and later you may pay the EMIs also online.

There are some such ways to get out of debt, and you may try them by reading in detail about them. And debt can actually be strategically fought off. The only requirement is timely action before your credit score gets too dampened.

Read this also:  Guide to digital banking for single mothers

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