Simple Steps to Financial Stability with Ron Rauch

One of the top three things on the minds of single parents is finances. Most solo parents experience worry about how they are going to make ends meet during the challenges of living as a one income family.

Ron Rauch has a long history of work in the financial sector doing auditing as a CPA. he moved into the arena of personal finances and financial literacy when his wife began working with women at Seattle’s Union Gospel Mission helping them overcome homelessness, addiction, and domestic abuse. These women needed help knowing how to manage money. Ron developed a personal financial literacy course to address these needs and began teaching it regularly.
Any kind of significant life transition or crisis can lead to unsettling circumstances, especially financially. Single parents often find themselves dealing with unexpected financial changes related to budget and practical needs.

Regarding finances, Ron says the most important thing is gaining control. First, we have to get the needed head knowledge regarding money and second, we have to turn that into heart knowledge. The motivational issue to act intentionally to take charge of the practical reality of your finances is fundamental. It can be a daunting task for someone who has never been on their own.

Take Stock
Ron says you start by taking stock of what you have –all your assets and liabilities and understanding your obligations and responsibilities. You need to know where you stand so you can prioritize and plan for the future. Most of us don’t have unlimited resources so we need to develop a spending plan. In a situation of divorce or death of a spouse or loved on, our income often changes but the expenses seem to go on or even go up. Any reduction in income requires reassessment of how we are using our resources.

Start developing a plan ( one month at a time)
Ron says the best way to assess is one month at a time. This timeframe is one where we have a lot of visibility. We can look out several weeks and have a good idea of what our income and expenses will be. The basic principle is simple, but we can’t spend more than we earn. We have to start with the big expenses – shelter, food, transportation, childcare. These expenses can easily consume 60% of a spending plan and they are not discretionary. We have to eat, work, and care for our children. These expenses can’t be changed in the short run.

Separate spending into 3 categories:
Ron likes to break a spending plan into the areas we can change:
 Short term
Medium term
Long term.
Putting off discretionary spending such as clothing to allow for the needed funds for the essentials like housing. Ron says this strategy is assuming a second part time job is out of the picture for most single parents because of their children needing their care.

Dealing with debts:

If you are struggling financially, call your debtors to arrange so that you have enough funds to take care of immediate unchangeable expenses. But do not make promises you can’t keep. Once you have your finances under control, you won’t stress as much. Pay the bills once they arrive. Do not hold off on paying it back.

Giving & Tithing:

Giving can be a struggle when you are on a tight budget. Being able to set aside 10% of your income to tithe may not always be possible but it’s a good goal. This means we have to learn to live on 90% of our income. It’s not easy because of unexpected things that come up but if you set your mind to it, the results are amazing.

Ron shares that tithing gives us the right mindset. It develops our understanding that we are mere stewards of the resources God gives to us. Giving brings peace to our soul and it’s such a good example for our children.  

Saving:

As you are working on a plan and allocating money for a tithe, it’s important to allocate another 10% to savings so you can be ready for curve balls that come your way. While challenging, savings sets you up to be in a better position when the unexpected or emergencies arise. It helps you stay prepared for anything that comes your way.
Putting our knowledge that saving is important into action is a real test. Practicing the idea of paying yourself first helps. If you get in the habit of a monthly plan and allocate 10% for tithe and 10% for savings and then pay your bills, you will find yourself gaining financial stability.

For those who are parenting alone and have been for a while, so they have a regular budget in place. Ron shares that we need to keep an eye on financial security. Ron says he views this security as being in control of your money and being at peace with the money you have. If you feel anxious to have more money, you may need to get another job or get education that will help you increase your income. Thinking in term of short-, medium-, and long-term needs, Ron says we need to take advantage of employer retirement plans for long term especially those that do matching contributions. We also need to consider saving money for large but irregular expenses of life like a car, help with tuition, property taxes for the year. For things like this, we need ready access to three to six months of income in the form of savings. In the short term, we can do monthly budgeting by eliminating needless expenses, avoid paycheck to paycheck spending, and getting in the habit of paying bills as soon as they arrive. Ron says, “Keep it simple.”

Ron shares that as you build your finances especially in transition, “there are difficult decisions you make that involve sacrificial choices that have lasting consequences, good and bad”. And we won’t always make the right choices. Ron says he doesn’t know how anyone can do it alone. We need wise input from outside sources.

While there are free public resources available for practical and reliable help, he suggests finding someone you can trust and confide in, not just as an accountability partner, but somebody to bounce ideas off. That person may not be your main support system, but it needs to be someone knowledgeable about finances who aligns with your values and where you want to go. They may not be your spiritual or emotional support, but they can act as a sounding board. Don’t try to go it alone.

Often single parents feel concerned they won’t be able to provide for their family. This concern is natural but, ultimately, we must remember God is the provider for your family. The strategies we use financially matter but they aren’t the ultimate solution. At the end of the day, we have a Father who cares deeply for us and who puts people in our lives to guide us.

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