How to budget as a single parent

Being a single parent comes with unique financial challenges. With only one income, managing the cost of living can be difficult and increase the risk of falling into debt. But debt isn’t a dead end—there are strategies and resources available to help you manage financial pressures. Here are some small steps you can take as a single parent to manage household finances.

Additional expenses for single parents

Single parents often encounter extra costs that can strain any budget—with childcare being one of the most significant expenses. Whether it’s daycare, after-school programs, or at-home babysitters, these costs can add up quickly. Additionally, regular expenses such as clothes, shoes, school supplies, extracurricular activities, and summer programs can further stretch your budget.

Legal fees are another potential burden, especially if you’re dealing with divorce, custody battles, or estate planning. If you decide to buy out assets or equity from your partner—for cars, homes, or retirement investments—you may incur additional expenses and debt. Learn more about what happens to debt in a divorce.

Don’t forget about healthcare—while most doctor’s visits are covered in Canada, some appointments and prescriptions aren’t. Without a partner’s insurance coverage, you might have to pay for more healthcare costs out of pocket. It’s a good idea to start an emergency fund for health and other unexpected expenses that might pop up.

These essential costs are often unavoidable—so how can you afford it on just one income? Budgeting and utilizing financial programs are a great way to start!

Financial programs and benefits for single parents

There are several programs and benefits available to help single parents fill financial gaps:

• The Canada Child Benefit (CCB) is a tax-free monthly payment designed to help with the cost of raising children under 18. Most provinces also provide a provincial child and family benefit to qualified families for additional supplemental income, which can be combined with the CCB.

• You may also be eligible for the Canada Carbon Rebate (CCR), depending on your province. If your child is already registered for the CCB, an amount for each eligible child will be included in the calculation of the CCR.

• Subsidized childcare is also available in many provinces—you can meet with community services in your area to discuss the programs available.

• The GST/HST credit is a tax-free quarterly payment that helps individuals and families with low or modest incomes offset the GST or HST they pay.  As a single working parent who pays income tax, you may be eligible for a tax credit that can significantly increase your refund. Make sure to apply for the additional GST/HST credit this tax season.

What happens to alimony or child support payments if the payer files for insolvency?

Child and spousal support payments are considered priority debts and can’t be discharged through a bankruptcy or consumer proposal. This means that the obligation to make those payments and pay any related debt continues despite filing. Though collection actions like wage garnishment or asset seizure are normally stopped by an insolvency, this doesn’t apply to child or spousal support. This special treatment ensures that the financial needs of children and former spouses are protected in the event of insolvency.

How are children’s RESPs treated in an insolvency?

In most provinces, a Registered Education Savings Plan (RESP) is considered a non-protected asset, and the portion contributed by you (not including the government’s contribution) can be seized in the event of bankruptcy. RESPs are set up by and registered in the parents(s) name, meaning it’s considered the parents(s) asset. If you file for bankruptcy, your Licensed Insolvency Trustee (LIT) is required under the Bankruptcy and Insolvency Act to recover the net value of the RESP for distribution to your creditors.

Understanding the rules in your province and exploring options to protect your child’s education savings can help you make informed decisions during financial difficulties. Let us help—book a free consultation to better understand what insolvency might look like as a single parent.

Budgeting strategies for single parents

Making ends meet on a single income requires careful planning—one of the most important steps is to track your spending to understand where your money is going. Start by setting financial goals and building a basic budget. Reference it often and review it every month! If your expenses match or exceed your income, it’s time to look at cutting costs. Try switching to cheaper services, cutting out non-essential spending, paying off debt to reduce minimum payments, or adjusting your mortgage payments.

Need more ideas on ways you can save? We asked our debt solutions professionals for their best budgeting tips, here’s what they suggest:

• Find the method that works best for you: Some may prefer spreadsheets, while others prefer a physical calendar or even a phone app. Use whatever method keeps you consistently checking and updating your budget.

• Use cash for gas, groceries, and fun: Try withdrawing your budget in cash. This way you can visually see how much you are spending and make it easier to say “no” to things that aren’t essential.

• Try meal planning: Most of us struggle with the cost of food. Dining out and using food delivery services can quickly eat into your budget. Planning for 2-3 days of meals at a time instead of a full week can help reduce food waste, keep your meals fresh and exciting, and deter you from turning to takeout.

Adjusting your financial lifestyle to accommodate the loss of an income or the addition of new expenses on a single income can feel impossible—but you’re not alone. Financial stress is more common than you think and can take a toll on your mental health. If you’re overwhelmed with debt, Grant Thornton can help.