As a single parent, you have the same financial concerns as everyone else – only that you do not have a partner to share your financial burden. Because you are solely responsible for yours and your children’s needs, it is very important that you make sound financial decisions. By acting on some of the tips given here, you should be able to feel more confident when it comes to taking charge of your family’s financial future.
Budget
Everyone needs a budget planned out in order to better manage his/her income regardless of whether you are single or married. However, if you are a single parent, the need to draw up a budget is greater because there are more demands placed on your single income. Thus, it is even more necessary for you to pay close attention to how you spend your income. A single parent needs to have a household budget planned out and be disciplined in adhering to the budget.
Begin a Savings Plan and Start Investing
When you plan your household budget, remember to allocate some money each month to a savings plan. Sometimes this is called “paying yourself first”, that is, to include money to be put aside for yourself in your list of monthly expenses. These savings should be going into a safe, less risky investment vehicle because as a single parent, you cannot afford to take much risk since you are the sole breadwinner in your family.
Increase Your Financial Literacy
The biggest mistake a woman can make is to be ignorant. Educate yourself by attending seminars and workshops on smart investing, and financial planning, among others. This is to ensure you get on the right track in making informed financial decisions.
Build a Financial Safety Net
Having an emergency cushion of several months' worth of living expenses is even more important now that you are on your own. Some financial experts suggest you should set aside at least three month's worth of living expenses apart from some savings for emergency purposes. This money should be invested in a less risky investment vehicle or trust fund that you can easily access when the unexpected expense arises. The other important financial safety net is your insurance coverage, particularly your health and disability insurance. And if you are the main source of support for your children's education, you should ensure your insurance coverage is enough to support your children's education.
Start a Retirement Plan
Even single parents will retire someday. It is important that you start your retirement planning regardless or your age. Women should make their life expectancy an issue when drafting a retirement plan. The best advice is to start aggressively saving and investing your money now.
Your Children and Money
Teach your children about money i.e. how it motivates people, how it requires making choices, and how it can lead us to the wrong direction if we are not careful in handling our money. Children with single parents often have this deep-seated fear of what will happen to them if the parents are no longer around. Explain to your children about your financial plan, your investment in unit trusts, insurance, property or your will. This information will be assuring, as it teaches your children that making plans on finances for the future is very important.
Lastly, single parents need to have a financial plan laid out so that you and your children will have a better future. If you do not have a financial plan yet, maybe now is the right time to start planning. Start now! Do not delay anymore, for the sake of your loved ones!
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