I admit that I was financially illiterate stepping into single motherhood. Especially coming from a comfortable two-income household for so long. But with mortgage, utility bills, childcare costs, and basically the need to survive suddenly falling onto my shoulders, I had to reevaluate my life and get help. Enter financial literacy.
Thankfully, managing money isn’t about being perfect. It’s about taking small, consistent steps that can lead to big changes. This guide is here to share practical advice and, hopefully, a little encouragement from someone who’s walked this path.
What is financial literacy?
First, the basics. Financial literacy is the ability to understand how to manage your money in a way that works for you and your family. Financial literacy can help individuals from creating a budget to saving, investing, and managing debt to achieve long-term financial success. It encourages individuals to make smarter decisions about their money. According to research from the University of Newcastle, higher levels of financial literacy leads to greater life satisfaction.
For us single mums, it’s about finding ways to create stability, ease the stress, and set a good example for our kids. I’ve learned that even small changes can make a world of difference for your long-term financial goals. The benefits of financial literacy are endless.
The unique financial challenges for single mums
Obviously, being a single mum comes with its own set of money challenges. When I first became a single mum, I quickly realised how much tighter my budget had to be. Every dollar had to work harder.
Once, my washing machine broke down, and I didn’t have an emergency fund. It was a hard lesson — and hard work, too, as I had to wash our laundry by hand for a few months. But it pushed me to start saving, even if it was just $10 a week. Between work, daycare runs, and keeping the house running, it’s tough to find time for detailed financial planning.
There's a variety of financial education you can find online. But if you don't have time to pursue them yet, here are practical strategies to help you become financially literate.
Financial literacy for single mums
Build a strong financial foundation
The first step of financial education is to assess your financial situation. Tracking my income and expenses was a game-changer. I started with pen and paper, moving on to Excel for personal financial management. Now, I use a free budgeting app that does the heavy lifting for me.
Separating needs from wants was eye-opening. I realised that my weekly macchiato was adding up to hundreds a year ... money I now set aside for our travel funds.
Establishing an emergency fund felt daunting at first. I started small ... just three months' worth of expenses. I sold some unused items online and put that money straight into savings. Seeing it grow, little by little, was so motivating. Checking my credit score felt scary at first, but it was empowering. It helped me see where I could improve and set goals.
When it comes to mortgages, understanding interest rates is crucial. If you’re a homeowner or considering buying, look for ways to reduce your interest rate or refinance. Even a slight reduction can save thousands over the life of your loan. For renters, saving for a deposit might feel like a far-off goal, but every little bit helps. Don’t be afraid to explore government grants or programs designed to support single parents.
Increase your sources of income
Boosting your income can make a significant difference in your financial stability. As a single mum, flexibility is key. Side hustles like freelance writing, graphic design, or virtual assistance can be done from home and often on your own time. I started ESL tutoring online, and the extra income helped cover unexpected expenses.
Selling unused items around the house is another quick way to generate cash. Platforms like eBay or Facebook Marketplace make it easy to find buyers. Sell crocheted clothes and knickknacks on Etsy. Services like consulting, photography, or fitness training can also provide a steady stream of additional income.
Upskilling is another powerful tool to improve your financial health. Free or low-cost courses online can help you develop new skills that might lead to higher-paying opportunities. Whether it’s coding, bookkeeping, or learning a new language, investing in yourself pays off in the long run. It may seem like another bump on your budget, but it's worth it.
Additionally, don’t overlook opportunities within your current job. Asking for a raise or taking on extra responsibilities could lead to an increase in earnings.
Smart strategies for managing debt
Using a credit card is not bad. I learned to separate “good” debt (like a loan to kickstart your business) from “bad” debt (like that store card with high interest rates).
Regardless of how much money you receive, debt must be paid back. In my case, the snowball method worked wonders. Paying off my smallest debt first gave me the momentum to tackle bigger ones. Each win felt like a weight off my shoulders. The goal is to maintain good credit score.
Be wary of offers that appear too good to be true. Payday loans seemed tempting when money was tight, but the high compound interest was brutal. Learning to avoid these traps helped me make smarter choices and saved me from deeper financial trouble.
For student loans, look into repayment options. Keep track of any policy changes that might affect your repayments. Making small, voluntary contributions when you can may reduce the total interest accrued over time.
If you’re still studying, look for scholarships or grants tailored to single mums. They’re out there, and they can make a big difference.
Saving and investing on a single-income
Last Christmas marked the first time I got to take my daughter to a vacation since becoming a single parent. It took a year, but I was able to save enough for our holiday trip. Seeing my daughter's face light up made every packed lunch and skipped macchiato worth it. Delayed gratification is really the key!
Investing seemed intimidating at first, but I started small with a micro-investing app. It’s incredible how even tiny amounts can grow over time. Reviewing my super fund felt like adulting to the max, but it was worth it. I switched to a fund with lower fees. Now I feel more secure about the future, especially my child's college education.
A portfolio of stocks can be a valuable addition to your investment accounts, even if you’re starting small. Begin by understanding the basics of risk and diversification as well as buying and selling to get you started. It involves learning about laws and regulations of the financial industry regulatory authority on different investment vehicles.
Index funds or exchange-traded funds (ETFs) are beginner-friendly options that spread risk across multiple stocks. Study the New York Stock Exchange. Financial literacy is not about gambling on the stock market but making steady, informed decisions to grow your wealth over time. Even $50 a month invested consistently can add up significantly over the years.
Financial advice for single mums (cont.)
Planning for the future
Retirement might feel like a distant dream, but it’s important to make sure you have adequate income in retirement. As the concept of time value of money goes, a dollar saved today is worth more than its worth later in life. So, there's no better time to start your retirement account than today.
If you’re employed, check if your workplace offers additional super contributions or employer-sponsored retirement. These can make a huge difference in your retirement savings. For self-employed mums, setting up a super fund and contributing regularly is crucial when you plan for retirement. Every small contribution to individual retirement adds up over time, thanks to the magic of compounding.
Health insurance and similar financial products are another area that deserves attention. If you’re not covered, unexpected medical costs can derail good financial plans. Look for affordable plans that suit your family’s needs, or explore public healthcare options if private insurance isn’t feasible right now. Prioritising health insurance ensures you have a safety net when it matters most.
Teaching financial literacy to kids
Having children instilled with financial literacy can take a major load off your shoulders. She's just three, but for Christmas, I gave my daughter three pretty (and cheap) piggy banks labeled “Save,” “Spend,” and “Give.” It’s amazing how quickly she caught on to the idea of saving for something special.
I hope that when my daughter sees me comparing prices at the supermarket, it becomes a teaching moment on budget and personal finance. Now, although unknowingly, she even participates in my quest to minimise our bills.
Talking about money openly with your kids is powerful to help them avoid making bad financial decisions. Share your financial goals and challenges with them in an age-appropriate way. Teaching them early ensures they grow up understanding the value of money and the importance of making thoughtful financial decisions.
Accessing support and resources on financial literacy
Centrelink payments and childcare subsidies have been a lifeline at times. Don’t hesitate to use these resources ... they’re there to help. Speaking to a free financial counselor helped me see options I didn’t know I had. It’s a judgment-free way to get back on track. Finding an online community like Beanstalk Mums connected me with other mums who’ve shared fascinating tips and encouragement for attaining financial literacy.
If you’re navigating debt or need help creating a plan for your finances, reach out to organisations that offer free financial literacy courses or one-on-one advice. These financial literacy resources can provide clarity and confidence as you move forward.
Overcoming financial anxiety
For a long time, I felt embarrassed about my financial struggles. As I mentioned early on, I was far from being financially literate. But I’ve learned that everyone has setbacks. It’s about moving forward, not looking back. When I paid off my first credit card, I and my little one celebrated with a homemade pizza night. It was a small victory, but it felt huge. Spending on what truly matters, like experiences with my daughter, has brought me so much more joy than any material purchase ever could.
Focusing on small wins can make a big difference. Whether it’s saving $5 this week or paying a little extra toward a debt, every step counts. Be kind to yourself and celebrate progress, no matter how small. Financial literacy is here to help individuals reach their goals like buying their forever home or opening their dream business.
Conclusion: Personal finance basics for single mums
Mastering money as a single mum isn’t about being perfect; it’s about progress. With rising living costs and global levels of debt, financial literacy is more important than ever. Achieving financial literacy helps you toward empowerment and resilience. Remember, every small step — understanding where money is going, creating a budget, investing in stocks, or saving a few dollars a week — adds up.
Financial literacy includes different strategies. Start today by picking one strategy from this guide to try. And don’t forget: it's never too late to start if you want to improve. Equipped with financial knowledge, we can start building secure, happy financial futures for ourselves and our kids. You’ve got this!
