People say being a parent is the most rewarding job in the world — but it is also incredibly high pressured at the best of times, not to mention expensive.
Coronavirus has made things even tougher for parents, particularly those with young children. According to research by the Fawcett Society and Maternity Action, half of parents with young children are currently struggling to make ends meet, with 43% reporting that they have nearly run out of money. This is significantly higher than the 18% of non-parents nearing the end of their funds.
The study also shows that compared to people without children, parents are twice as likely to say the next three months will be a significant struggle financially — 51% of parents of under-11s and 56% of single parents said this, compared to just 27% of those who are not parents.
These are all worrying statistics — and no wonder some parents are worried about their ability to pay their bills, rent or mortgages, as well as the level of debt they expect to face in the future.
However, it’s not all doom and gloom. Martin Lewis, founder of MoneySavingExpert, pointed out that around 25% of parents feel that they will be better off thanks to Covid-19.
“With the economy predicted to shrink by a third this quarter, the number who have hit dire straits sadly needs little explaining,” Lewis wrote in his weekly newsletter. “Yet the fact one in four people will see improvement probably does; for many still working, locked in at home, their income is stable, and expenditure vastly cut. It even leaves some starting to save for the first time.”
So what can parents do to take control of their money and feel more financially secure?
Here are four ways to help yourself and your family during lockdown:
Know your money — and make a budget
We’ve said it once and we’ll say it again: the best thing you can do for yourself when it comes to your money is to pay attention to it.
Take some time to work out how much you have, how much is coming in, how much is going out, and where it’s going to. You may want to split out costs according to the different people in your household — that way you can better track exactly what you’re spending on your family and what you’re spending on your home, bills, mortgage or rent, etc. Once you know how much you have in your bank each month, you can make a budget that can help you cut back (if necessary) or start saving more efficiently.
Pay attention to your debt too — some personal debt (like overdrafts and credit cards) will come with much higher interest rates than others. If you can, you may want to pay off the cards or loans with the highest rates first, transfer your debt to a card with a better rate, or look at payment holiday options to give yourself some headroom.
Need tips on building a budget? Why not check out our blog on Financial Self-Care?
Know your rights — and your resources
Whether you’re in full-time or part-time employment, running your own business or freelancing, furloughed or unemployed, you will want to know what rights you have and what resources you have access to — particularly as certain schemes change or evolve. Some particularly important ones to look at include:
- Furloughed? It’s hugely positive that the scheme has been extended to October, but now is a good time to speak to your employer and discuss what options are on the table for returning to work. From July, you’re likely to be able to return part time, though the details of how this will work have not yet been shared by the Chancellor.
- Universal Credit and Child Benefits — take a look at the criteria and see if you can get help if needed, some of the rules have been amended in recent weeks due to covid-19 and accommodating furloughed salaries, so you may now be eligible if you weren’t previously.
- Help To Save — if you are new to Universal Credit, this initiative is a great one to be aware of as it rewards people for building a savings habit, paying a 50% bonus on up to £1,200.
- If you’re running your own business, explore the eligibility checks available for things like the Self-Employed Income Support Scheme and Bounce Back Loans. The government has confirmed that the Bounce Back Loan Scheme can be used to support your usual income, which could be very useful for those who can’t apply for other support measures.
- Stay aware of the dates involved — whilst the government’s furlough scheme has been extended until October, SEISS has not yet seen further announcements and comes to an end at the start of June. It’s expected to see a similar extension, but this has yet to be confirmed.
Build a routine around childcare
One of the most difficult things about lockdown has been childcare — or rather the lack thereof. It’s left many parents, but especially mothers, struggling to adapt their work lives around child-care and education. It may take time to adjust, but creating a structure of your own will be invaluable — helping you split household tasks, be more efficient with your energy, building a work/life balance that actually fits your time, giving you moments to connect with people beyond your unit, and hopefully giving you space for yourself as well.
Keep on talking
It’s really important to talk about the m-word as a parent.
Our habits and hang-ups about money are ones that our children will inherit — whether for good or ill. If you have a healthy relationship with your finances, your kids are much more likely to as well.
And that’s not to say that you need to have lots of money, just that how you earn and spend, and how you socialise and behave around money, all affect how your child perceives your finances too. So if you can demonstrate confidence in your financial decisions, a positive understanding of debt and strong saving habits, then your children are more likely to feel positive and confident about their money in the future too.
Your experiences and emotions will define what they see as normal, so with this in mind:
If you’re in a relationship: talk to your partner — It won’t feel romantic and it might be difficult if the family finances are usually left to one person rather than split equally. But talking to each other about your finances, both personal and shared, is invaluable — not least because the couples who regularly talk about money are tipped to be the happiest couples.
If you’re single: talk to your family or friends — Building your support network will only ever help in the long run, even on topics that feel a little taboo like money. Having people you can turn to with questions, anxieties, celebrations and revelations will help you feel more in control, more confident, and more positive about your money. So, whether it’s someone you can vent to when things are tough and you’re feeling isolated, or who you can laugh with and share ridiculous stories of crayon on the carpet again — it’s well worth reaching out and starting those conversations.
Either way, speak to other parents
Talking about your finances can often feel deeply personal, especially if you’re struggling. But talking to people who know what you’re going through is empowering. You’ll quickly find that people have lots of good tips to share — and likely realise you have some good habits others can learn from too. The key is to be open and honest where you can — but you don’t need to delve into details if you’re uncomfortable. Focus on your emotions and experiences. You’ll be surprised at how good it feels to share and be understood.
Authors: Harriet Allner and ikigai.
Harriet Allner is a writer, blogger and fintech specialist. She cares about stories that matter and is passionate about promoting conversation around money positivity and financial feminism.
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