Being a single parent is tough, especially without adequate support. It’s emotionally and physically draining and financially challenging, particularly in today’s economy.
Compounding the challenges, three significant governmental benefits available to many families have been recently cut back: Medicaid, food stamps (Supplemental Nutrition Assistance Program, or SNAP) and the Child Tax Credit.
The expanded child tax credit expiration has been especially difficult for middle-income families. Under the expanded credit, single parents could earn up to $112,500 and still be eligible for a refundable credit from $3,000 to $3,600 per child, with half pre-paid in monthly installments during the year.
The credit was reduced to $2,000 per child in 2022, with the refundable amount reduced to $1,500. (If a single parent has two children ages 5 and 7, the change reduces their monthly take-home income by $300.)
Lower take-home pay and increased inflation (6.5% in 2022) make taking advantage of any opportunities for support to raise your family more important than ever. Here are some suggestions …
Find better employment
If you are happy at your job, great. However, if your employer does not offer regular pay increases, non-taxable benefits, stability and reasonable flexibility, consider changing jobs.
For instance, if your employer is not providing a minimum of a 3% cost of living raise annually, your pay is not keeping up with inflation. This means your standard of living and ability to pay your bills is falling every year.
With low unemployment rates, it’s an employee market. Companies are having a hard time finding competent, productive employees. This could be the perfect time to search for a corporate, government or union job with pay that keeps up with inflation.
The problem with many small employers and industries like retail and hospitality is that they may not have the resources to offer you the same benefits or job security as larger corporations, government positions or union jobs. This can make accessing necessary resources such as health or dependent care difficult and expensive.
Also, smaller companies and some industries have irregular work schedules or require overtime, making balancing work and family responsibilities a challenge.
Working for a big corporation or government agency may offer better access to non-taxable benefits such as healthcare, retirement plans, paid emergency leave, and dependent care assistance. These benefits can significantly reduce anxiety about paying for possible emergencies and can give you a sense of well-being about your future.
A union or government job can also provide more security, regular wage increases, shorter and reliable work hours, and protection against discrimination or unjust termination. Since your family relies on you for everything, changing employment could allow you to focus less on making ends meet and more on spending time with your kids.
Go back to school
Another consideration is returning to school, not just to increase your earning potential and personal growth, but for the benefits (again, many non-taxable) and the community support available to students with children.
Most universities offer students with children housing, healthcare and childcare benefits.
For example, a two-bedroom family student housing apartment at UC Irvine starts at $1,216 a month, including most utilities, compared with an average of $3,470 a month in Irvine, not including utilities, according to rent.com.
In many cases, your financial aid package will include living costs. Full-time preschool childcare rates for CSU Fullerton students are $257 a week. Some benefits are available even to part-time students.
Most larger colleges have a family student office or coordinator. Contact the school you would like to attend for more information.
Prioritize additional support
Finally, take advantage of all the local support services available to single-parent families. Remember that “low income” is a relative term. You do not need to be low-income or even report your income to qualify for many support services, especially those offered locally and by your church or temple.
For example, our town has community grants to help pay for youth sports registrations. Although they collect demographic information about participants, there is no income eligibility requirement.
Many community organizations, including the YMCA, Boys & Girls Clubs of America, local community centers and faith-based organizations are excellent sources of affordable and high-quality childcare programs, including after-school and summer camps. Many can also help with food insecurity, counseling, and housing.
Check out local childcare cooperatives, which are member-run organizations where families take turns providing childcare for each other. This can be a lower-cost alternative to traditional childcare options and a great way to meet other single parents. Many childcare, carpooling, food co-op, and single-parent support groups can be found on Facebook.
Since it is tax time, the IRS Vita program (go to irs.treasury.gov/freetaxprep) can provide a valuable service at no charge if you do not have the financial resources to hire a professional tax preparer or are not comfortable filing taxes on your own. Volunteer accountants can help ensure that you receive your maximum refund.
Being a single parent can be challenging, but many resources are available to help ease the financial burden. Find employment that offers non-taxable benefits, stability, and flexibility. Consider returning to school to gain new skills and increase your earning potential while accessing support services and living in a safe, supportive community. Seek out local and faith-based organizations to get the help you need.
Remember that you don’t have to do it alone, so be sure not to isolate. There are people and organizations out there that want to help you and your family succeed. So, whether it is your relatives, friends, work, school, or in your neighborhood, reach out, ask for help, and build a structure that supports you.
Michelle C. Herting, CPA, ABV, AEP, specializes in succession and tax planning, business valuations, and settling trusts.
