5 budgeting tips from a single mom who traded in a $14 an hour job for a six-figure income
Insider's experts choose the best products and services to help make smart decisions with your money (here’s how). In some cases, we receive a commission from our our partners, however, our opinions are our own. Terms apply to offers listed on this page.
Courtesy of Clarissa Moore
- Budgeting coach Clarissa Moore knows firsthand how hard it is for other single moms to manage their finances.
- Moore recommends five simple budgeting tips, starting with creating a budget aligned with your goals.
- You should also adjust your budget on a regular basis and start small with savings.
Clarissa Moore, a 35-year-old single mother earning a six-figure income, learned about managing her personal finances the hard way.
A traumatic car accident in 2009 that severely injured her 11-month-old daughter also left her facing money problems that snowballed over the next five years. In 2013, she finally landed a stable job at an electric company where she was earning $14.34 an hour.
From there, she committed to improving her relationship with money. Moore simultaneously paid off her debts, built a healthy emergency fund, and focused on creating multiple income streams on top of her corporate job.
Today, Moore earns six figures from a range of sources, including a financial coaching service, through which she advises others how to do what she did. Paid partnerships through her Instagram page Clarissa Explains Money also help her share personal finance tips with her 127,000 followers every day.
Here are five key pieces of budgeting advice Moore has for other single moms seeking to better manage their finances.
1. Start small with your savings
Moore knows firsthand how many financial hurdles get in the way of single moms building real wealth.
"Daycare is ridiculous," she says. "Start small with savings. I started saving $5 at a time, and there were months where I was saving $2,000 just because I got it."
In theory, says Moore, if you can hold onto $5 at a time, it's easier to create the habit of saving regularly. Then it becomes easier to hold onto windfalls of cash, like a tax refund or annual bonus.
2. Let go of budgeting strategies that don't work for you
"There's a lot of information out there about budgets," Moore says. "Some of it works for some people, but some of it doesn't work for everybody. Then you feel bad because you're like, 'Oh, this person is using this budget and they're so successful, and I'm not getting it."
Resist the urge to compare yourself to others, and instead focus on finding the budgeting strategy that's right for you, she advises.
For example, Moore once tried the cash envelope system but soon realized it caused more headaches than its promised benefits. While getting cash on a regular basis was incredibly inconvenient, Moore understood what made cash envelopes appealing in the first place: the ability to organize your funds into different categories.
"What did work for me was getting multiple bank accounts so I can have multiple buckets to put money into," she says.
3. Create a budget that reflects your goals
There's one common mistake Moore sees among single moms: They believe they don't earn enough to create a budget in the first place.
"The amount of money you make doesn't determine whether or not you need a budget," she says. "If you make a penny, you need to budget that penny."
When creating a budget, she recommends starting with your end goals in mind. For Moore, her savings goal was to buy a rental property. Naturally, her monthly budget had a specific savings category for the down payment and closing costs on that home. In the meantime, she listened to real estate investing podcasts nonstop to keep herself motivated while saving more than $23,000.
4. Review your budget regularly
Once you start budgeting and tracking your expenses, Moore says you'll begin to understand your spending patterns more clearly.
"You're not gonna create a budget at 20 and it's gonna be the same at 45," she says. "Make sure that you're making those adjustments and not letting those changes discourage you. Things happen, right? With kids, accidents happen. Over time, it gets expensive."
5. Pay yourself first
Single moms need to reward themselves first, Moore says. No matter how much or how little you have, designate a small portion of your earnings to getting your nails done, buying something small, or treating yourself to a meal with friends.
"Give yourself an allowance," she says. "We work really hard for our money. So for us to work all the time, do overtime, then have to let it all go to bills, from a psychology background, it doesn't make sense. When you're doing something and you see no results, you want to quit, right? So you gotta do stuff for yourself, even if it's just $20 a month or $20 a week."