You heard that financial literacy is the answer to all your money problems, so you started reading personal finance blogs and maybe even bought some personal finance books.
Alas! You are still stuck in debt and still living paycheck-to-paycheck despite reading everything you can about personal finance.
While I agree that getting a financial education is an important first step to taking control of your finances, financial literacy alone will not change your circumstances.
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Here are some reasons why single moms are struggling financially:
6 Reasons Why Single Moms Are Struggling Financially
1. Not taking action
It doesn’t matter how much you know if you don’t use it to change your circumstances.
I started learning about personal finance in 2008, but I didn’t practice what I learned until years later when I found myself in a financial mess.
I knew about saving, budgeting, spending less than you earn and all that good stuff. But, I was still fiscally irresponsible because I didn’t translate what I knew into action.
You can struggle financially even if you know all the personal finance terminology, can calculate interest rates in your sleep, and know all the investing strategies.
To get ahead financially, you have to stop procrastinating and making excuses. Stop waiting for the perfect moment because it may never come.
You need to practice everything you’ve learned about personal finance to see any results.
Sometimes, we all need a wake-up call before we take action. For me it was getting divorced.
But you don’t need to wait until something bad happens before you take action. You will save yourself a lot of heartache and sleepless nights if you commit to taking action today.
2. Failure to change bad money habits
Many people wish they could change their situation, but they are unwilling to make sacrifices, or change their bad money habits.
If you keep running up your credit cards when you’re trying to get out of debt, then I am afraid it’s not going to happen.
You know you should spend less than you earn so you can build up your savings, yet you find it hard to implement this simple concept.
The problem is, you are unwilling to give up some pleasures now so you can reap the rewards later. I know exactly how that works.
With all the financial knowledge I acquired, there was no noticeable change in my money habits or behavior.I continued to spend money like I was financially illiterate. I didn’t understand why I should deprive myself of anything.
Some people argue that it’s foolish to save all your money for retirement when you will be too old to enjoy it. They would rather spend all they have now and have fun.
But, like Dave Ramsey said,”it’s better to live like no one else, so you can live like no one else.” If you keep wasting your money on things that add no value to your life, then it’s going to be difficult, if not impossible to get ahead financially.
3. Failing to categorize and track your expenses
Another reason why some single moms are struggling financially is their unwillingness to differentiate between wants and needs. This simple concept will stop you from meeting your goals.
In my opinion, there are three types of expenses: necessary, discretionary, and unnecessary. An example of an unnecessary expense would be paying overdraft or bank fees or late payment fees on bills etc.
Failure to track or categorize your expenses means you’re more likely to engage in impulse spending, and waste money on unnecessary stuff.
Knowing what you need and what you can do without, will help you to slash your monthly expenses and have more money to save, invest, or pay off debt.
4. Failure to change money attitudes or beliefs
One definition of insanity is to keep doing the same thing, and expecting a different result.
Unless you change your money attitudes or beliefs, you’re not likely to get any benefit from your financial education.
If you continue to allow your emotions to dictate how you spend money, you will remain in a financial rut.
The antidote is to practice conscious spending. Which means you have to be intentional about your spending.
It means no more impulse spending because you need some “retail therapy.” You have to consider how your purchases will affect your finances before you whip out your credit card.
I used to be an emotional shopper. I would go shopping to make myself feel better, or because I deserved it. I had to change my mindset towards saving, budgeting, and spending before I started seeing a change in my finances.
If you really want to take control of your finances, then it’s important to control your attitudes and beliefs about money.
Don’t let other people’s opinions determine your actions.
A common opinion is that it is always better to buy a home. You hear things like “I’m wasting money paying rent instead of a mortgage.” So you feel pressured to buy a home even when it doesn’t make financial sense to you.
You’re trying to be like everyone else, so you can fit in and be normal, but normal isn’t always the best thing for you.
You need to figure out some erroneous beliefs and myths you have about money, and replace them with facts.
Your bank balance will thank you.
5. No real desire to change
Sadly, a lot of people are unwilling to change. There’s no real desire or motivation to change.
They’re happy with the way things are. For people like that, the pain of change is more than what they are experiencing. So they are content to carry on living in denial, and pretending that everything is okay.
Or maybe they put in some half-hearted effort before throwing in the towel.
This may be due to laziness, peer pressure, or lack of motivation. For these people, it’s just too much work to change.
Most people hate change (including me), and prefer to keep things as they are. They do the minimum required to get by, and just hope things will sort themselves out.
But they rarely do, when it comes to your finances.
You probably know someone like that (or maybe you’re like that). Without a real desire to change, no amount of financial literacy will help you.
6. Ignoring the emotional side of finance
It took me a long time to admit that a lot of my financial decisions are based on my emotions.
What motivates you to spend money the way you do? Until you understand the underlying emotions behind your poor financial decisions, you will continue to struggle financially.
When are you more susceptible/prone to impulse spending? What triggers your out-of-control-spending?
For me, it’s usually guilt. Being a single mom is tough.I feel guilty about the divorce, and I hate saying no to my kids.
I had to work on my emotions.
I realize that buying stuff for my kids to appease the guilt I feel isn’t the best way forward.
It’s still tough to say no to them, but it’s helped our finances a lot. We practice conscious spending and spend money only on things that are important to us.
Buying crap because I feel guilty about something is not the solution.
If you find yourself going on a shopping spree, and then feeling remorseful afterward, you need to stop and identify what triggers it.
For example, if you spend a lot of time watching TV and commercials, sooner or later the advertising will get to you. Trust me, no one is immune to constant marketing.
You must identify the triggers in your life and figure out a way to deal with them.
So now that you know some reasons why single moms struggle financially, what are you going to do about it? Do any of these reasons apply to you?
Let me know in the comments!
If you’re just getting started with taking control of your finances, here are some resources that helped me: