Parenting is not for the unprepared. Many two-parent families struggle to keep up with the financial demands of parenthood, but single parents often have a more challenging time, since they may have to cope with a single income.
In light of this, we’ve compiled six tips that will help single parents keep their finances on track:
Budget: A budget is the first and most logical place to start, as it will help you keep up with your expenses and also show you where you can cut back to save money. Even drawing up a loose budget can keep expenses – and overspending – in check.
Plan for any eventuality: If you are your child’s sole financial support, it is vital that you have the following in place:
Serious illness cover.
The above tools will ensure that you have an income if you are unable to work or are retrenched, and - in the case of life cover – ensure that your family will be financially protected in the event of your passing. For more information, go to https://lifeinsurance.standardbank.co.za
Review your financial information: If you’re divorced or widowed, your financial situation may change. See a financial planner to ensure your accounts and assets are registered under the correct names, and your beneficiaries have been changed, if needed.
Emergency stash: Financial advisors suggest that you have three to six months’ of expenses saved in an account that allows you fast access to your money. This will act as a ‘safety net’ for financial emergencies, like a burst geyser or bumper bashing.
Retirement savings: Single parents sometimes neglect to save adequately for retirement, because there are so many other demands on their finances. While it is tough to save on a limited budget, your retirement savings need serious consideration so you avoid becoming a burden on your children later in life.
Keep debt at bay: Use credit wisely and keep on top of the repayments to keep your credit record healthy. This will help you access finance for big purchases, like a house or car.
It’s not always easy to raise children as a single parent, but it can and has been done with great success. If you use the resources available to you – advice from your bank and financial planner – the end result can be financial stability and happy children.