Being a single parent often feels like handling 20 things at the same time. You have so many things too look after – taking your kids to school, cooking meals at home, completing all the projects within deadline, narrating fairy tales to your kids at night, etc. Thousand things are running in your mind at the same time. It feels as if you don't have sufficient time or stamina or money to do things that your heart desires. And this feeling is extended towards your credit as well. You hardly have any time to take care of the credit challenges you face as a single parent every day.
Why are single parents and credit not good friends?
First things first, single parents have lots of financial challenges. They're are poorer than married parents. After all, single parents have to manage everything on a single income. They can hardly bank upon the support from their ex-spouse or parents. So, the pressure is immense upon them. Their income is likely to be lower for whatever they want to buy, be it for the living expenses or the kids.
Who struggle more - Single moms or single dads?
Well, as per the statistics, single moms struggle more than single dads . In 2011, 8.6 million single moms were the main earning member of the family and 2.6 million single dads were the head of a family. The median adjusted income of both groups was far less than their married counterparts. In 2011, median adjusted income of married fathers was $70,000. But in the same year, single dads earned only $40,000. The financial condition of single mothers was worse. They had to run a family of 3 members on a median adjusted income of $26,000.
Single parents - What kind of credit challenges do they encounter?
The credit life of both single moms and dads is entangled with series of tough challenges. Some of them are given below.
- You have to rebuild your credit without any support from your spouse
This is the biggest challenge you'll face as a single parent. If your credit got a big jolt from divorce, then you need to rebuild it once again. You can't depend upon your spouse's good credit to improve your credit score fast.
- You have to earn more to pay off joint debts quickly
If there's any joint credit card account, then there are 2 options - either you earn more and pay off debts quickly or depend upon your spouse for payments. If payments are not being made on time, then your credit score will drop.
- You've to qualify for loans on a single income
At some point, you'll need a credit card, auto loan or a mortgage. But, you've to qualify for any one of them based upon your single income. Lenders will review your credit report and find out if you make consistent payments to your creditors. If you don't happen to make regular payments, then your problems will be all the more difficult.
Single parents - How can they have a good friendship with credit?
Here are a few tips that may help single parents forge a good friendship with credit.
- Pick the right credit card: Debit cards have lots of benefits, but the most important one is that they help you steer clear of debts. However, there are some pitfalls of a debit card too. In case your account is compromised, you'll be on the mercy of the company until the problem is fixed. Moreover, you'll spend a few sleepless nights thinking how to repay your current bills with the money left in your account.
- Have a single monthly payment plan: Single parents having children under 18 years are 15% more likely to have debt problems. While a consolidation program won't help to reduce additional expenditures, yet it would help to bring together multiple debts under a single monthly payment plan.
The best part of a consolidation program is that it helps to simplify life and accelerate savings. Single parents would have to bothered about only one monthly payment every month instead of many. They may even be able to increase their credit score over the years.
- Review credit reports and dispute mistakes: Single parents can avoid a lot of credit problems by disputing the errors on their credit report. For that, single parents need to get a free copy of their credit reports and review each section carefully. They can get a free copy of their credit reports from AnnualCreditReport.com and filter the wrong the information. Moreover, they can get an idea about the areas of concern quickly.
Single parents start their financial life on a difficult note. Their life is full of ups and downs. But, this doesn't mean that their life would always be full of doom and gloom. If they take the right steps, their credit life will also be full of sun shine. Attitude matters a lot. If they stay positive, then they would be able to have a better control over their financial future.