Baby Step 1: My Financial Journey as a Single Parent

Two days ago, I shared a chart of the Baby Steps with the sub-listings. Along with a statement that is irresponsible to follow these baby steps to a T. And I am analyzing that, piece by piece.

Baby Step 0 is knocked out. Other than the spousal piece, there is nothing a single parent can't do.

So let's take a look at Baby Step 1: Save $1,000 in a starter emergency fund. 

• Chop up the credit cards. This was easy for me as I didn't have to cut them up. The credit card companies cut ME out! I made a plan for one of them to pay in installments over the next 5 years. Ouch. It froze the balance though, with no interest added, and it was a low enough amount, I just kept that going until all else was cleared, then I finished that one up. 
• Credit cards as a single parent feel like a lifesaver in the moment, but I ended up paying for GROCERIES up to SEVEN years after I'd eaten them! Gone! Out the other end and all! I didn't need credit cards! I needed a change in my already-highly frugal lifestyle that didn't allow for budget deficits! I won't tell anyone not to have credit cards, but nobody gets rich off of them! And they are so much more headache than they are worth. 
• I did get credit cards again later. Paid them off within 24 hours of them posting to my account, never paid a lick of interest. Got some cashback rewards. Discounts on Amazon. Great. Except the ongoing game being played to get those rewards, apply them, make all those payments on time. I had the money in the bank, just use a debit card and be done with the whole deal! 
• Get health insurance. We use CHM (Christian Healthcare Ministry) - I researched and selected it independently of knowing that it is the only one that Dave Ramsey advertises. Ha! That was an interesting coincidence! 
• I suggest looking at your other healthcare needs as well. We recently switched to a new doctor. We pay a monthly fee for our family and we get unlimited phone/text/e-mail access, 50 in-person visits a year, several labs and prescriptions are done right in the office by the doctor herself, you get appointments for as long as you need them (something you think is simple?  you can schedule 15 minutes; more involved or you're just not sure? 45 minutes, 60, 90 minutes). Our initial visit was 90 minutes each and THOROUGH. She gets to know us. And she refers us for other services based on what we need. No preauthorizations needed. I LOVE IT. This is the best thing for our family! 
• So take a look at YOUR needs. And see what options are available. You could save so much money and headache and nuisance having your health care aligned with your family needs and values. This is perhaps even more important as a single parent, since you are indeed the only one take all the kids to the doctor, to the specialists, and caring for them when they're sick. You need piece of mind. 
• Life insurance. Single parents need this. If something happens to you, you want your kids taken care of in your absence. And you don't want anyone responsible for your burial costs. Dave Ramsey has pretty strong statements on the types of insurance. I didn't do this step right away. If something happened to me while my son was smaller, the people who would have taken him in were able to do so without any additional money. But the burial costs got to me.... I did get it later in the game. 
• Amputate cars you can't pay off in 24 months. I had 3 years left on the car and I did try to sell it. But I wasn't being offered near what I needed to make the sale useful (able to buy something cheaper and pay down the loan), so I didn't let it go. In the end, I had the car paid off in 12 months from the date I started the Baby Steps, so two years early. And I still drive it today. It's a Toyota. I have had it for 10 years now and I've got at least 10 MORE years on it! 
• Raise deductibles if it makes sense. Health, auto, etc. Do what makes sense for YOUR family. Look at your typical and likely costs and do what makes sense! Lower deductibles mean the insurance company kicks in sooner, but you pay more in the meantime; higher deductibles mean lower premiums but you need a chunk of cash upfront. I did a mixed balance, some lower, some higher. With a lower emergency fund and not having the sinking funds yet, I didn't want to take the deductibles TOO high, but I also needed to free up some cash-flow from those premiums. 
• Do what fits YOUR family. 
• Draw up a will. If things are pretty basic, you can use LegalZoom or another similar service. If you need more details, you may need to contact a lawyer. I used LegalZoom and when it came to needing some of those documents (I did POA for medical care, my finances, my son's finances; care documents for my son; a few other items; and the all-important will), the ones needed worked out perfectly! No expense for me! Just needed a notary, but my bank offers that to their own customers for free. 
• Get Long-Term Disability Insurance. I opted out of this step, because my then upcoming line of work should provide for residual income. It does! It works! I had a 14 month furlough that this disability insurance would have helped with, but as it turns out, my income stream decreased but was steady enough to provide for my son and NO NEW DEBT. 

But what about the main goal? SAVE $1,000 FOR YOUR STARTER EMERGENCY FUND. 

My journey: I had to call everyone I knew personally that I owed money to or that I otherwise relied on (since I didn't have a spouse!) to get their insight on this ("had to" = my choice, I didn't feel right doing it without their permission). EVERY LAST ONE OF THEM agreed: do it. That way I have a lot more wiggle room before calling on them, using a credit card, or making any other poor decisions. But 2 requested to be notified when I touched the emergency fund so they would know there may be a need upcoming. 

Up to that point, as a single parent, I did not have an emergency fund. Everything went to debt or the next "emergency" - and it was all emergency because I didn't have an emergency FUND. 

Guess what? Most American's don't have even $500! Google it!

• https://www.cnbc.com/2019/01/23/most-americans-dont-have-the-savings-to-cover-a-1000-emergency.html
• https://abcnews.go.com/US/10-americans-struggle-cover-400-emergency-expense-federal/story?id=63253846
• If those links go outdated, it's easy to find more. 
• AND these numbers have NOT CHANGED in over a decade! 

So Dave Ramsey's advice of $1,000 is outdated, but the studies show the SAME INFORMATION year after year. 

What if you have more than $1,000???? 

• At this baby step, Dave says, "Check it off that you've done it and move on to the next step."

That's it.

So far, so good. 

As a single parent, I can still follow this to a T and be financially responsible. I was part of the population that didn't have the $1,000 and I was facing eviction, repossessed car, and living on food stamps. All while working my tail off to find a job or some source of income (I ultimately set up my own online business but that's another story!).