Solutions to Single Mothers in Debt
As a single mother, lets admit it, times get tough. You are fortunate
enough to have your children that mean the world to you, but it doesn't
come cheap. Of course you'd do anything to keep them safe, even if that
means struggling financially to support their well being. Debt can get out
of hand fast and with only one income it's hard to pay monthly rent,
mortgages, utilities, and food expenses on top of credit card bills. This
leads to unwanted stress but can be prevented if you get help.
If your monthly debt payments, not including mortgage or rent, surpass 20%
of your income, your debts are a serious problem and they need to be
addressed as soon as possible.
Solutions for a Single Mother in Getting Out of Debt:
Do it Yourself Approach
If you feel you have little debt but are starting to get concerned about
being able to pay it off, consider setting up on a budget if you don't
have one already or reevaluate your current one. A budget is a way to view
your personal cash flow, which is your money that comes in each month, and
your money that goes out each month. You'll need to keep track of all your
spending for one month to establish an accurate budget. Keep a record of
your monthly income and all your monthly bills and other receipts even if
you are paying with cash.
Once you see what you are spending, you should be able to cut back on
certain items especially on impulse buys like candy bars or everyday items
you don't think add up to a lot but do in the long run, like morning
coffee at your favorite coffee shop. Make goals for your self to set aside
a certain amount of money each month to put into a savings account or to
put towards paying off other debt.
After you create a budget you can choose to eliminate your debt on your
own by ripping up your credit cards, dealing with your creditors, and
still making all your payments on time. However if you tend to be late on
monthly payments it's recommended that you consider the next option for
debt relief.
Credit Counseling and Debt Management Programs
If your debt is severe it's recommended that you get help and fast. This
is where most people's embarrassments sets in and are afraid to get help.
However credit counseling is a great option to help you eliminate your
debt. You can find companies that do it for free, and all your information
is kept confidential. A credit counselor will evaluate your current
situation and then recommend the best solution for you.
A credit counselor may suggest a debt management program in which the
counselor would work directly with your creditors as well as provide you
with additional education, guidance, and motivation to make sure you get
through the plan and pay off your debt. This simply includes sending a
single payment each month to the agency, which is then dispersed to the
creditors that you owe money to.
Debt Consolidation
Another debt relief solution is debt consolidation, where existing debts
and mortgage payment are compiled into one. You would take out a loan,
often times using your home as collateral. Most mortgage-backed
consolidations pay the creditor direct to ensure pay off. However if you
fall behind you put losing your house at a serious risk.
Bankruptcy
An absolute last resort and not recommended for everyone is filing for
bankruptcy. With the new bankruptcy legislation you may want to review
it's recent changes and restrictions before considering declaring
bankruptcy. Bankruptcy is a court action that can absolve part of an
individual's debt.
However, it comes with a high price. Bankruptcy can destroy credit
worthiness up to 10 years after the discharge rate and it can even
restrict you from certain types of employment.
Kelly K specializes in advising young mums on grant and scholarships for
single mothers and has long authored educational and support pieces for
women and single mothers. Kelly is a contributing author and editor to a
variety of international and domestic web sites, and free newsletters.
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