Recent analysis has revealed that single mums form over 80% of single parenting. Single mums have experienced the hardest economic shocks as a result of the global Covid-19 crisis.
Single mums face unique financial challenges. They simultaneously try to provide for the family, take care of their own financial needs, whilst ensuring that; should anything happen to them, their children will be taken care of. Whether you are a single mother by choice or by circumstance; unmarried, divorced or widowed, here are some important money tips for you.
Create a Budget
Budgeting is important for us all but when there is only one income to support a family, it takes on a whole new meaning. An important money tip is to realistic budgets. Try to stick to it as this will form the basis on which you can confront any financial pressures.
How much are you spending? Is there anything you can cut back on? Pay close attention to how you spend. Track your expenses over a period of a month or two, this is good preparation for establishing a realistic budget. Doing these will help you to plan systematically to meet your immediate needs and long-term financial goals.
Build an Emergency Fund
Many single mums raise their kids with little or no financial other support from their children’s fathers. With no second income to fall back on, there must be a safety net. Another important money tip is to have a back up plan to tide you over difficult situations or emergencies. Children fall ill, there may be ageing parents to take care of – which tends to be the responsibility of daughters. There may be car or home repairs to worry about. Such events come out of the blue without warning, so it is important to be prepared with some funds set aside to fall back on. Six to twelve months of expenses are recommended.
Where will you live?
It could be a hard knock finding that you have to downsize; particularly if you have relied on two incomes to maintain the family’s standard of living, . Your priority should be to find affordable housing in a secure location. There must be a balance between; the need to live in a decent home in a safe environment versus having to put up with substandard housing. Don’t let keeping up appearances come into the mix. It is better to “downsize” in the short term, than to jeopardize the future financial security of your family.
You need a support system
Support system matters more now than ever in this pandemic situation. For many single mums, especially those that are essential workers; it can be so difficult to find or indeed afford the right child minder, whilst maintaining the important protocols to keep your family safe. This will take a chunk of your income but is very important for your peace of mind and being able to keep your job. If you are in a position to work virtually, this may be the best option. If you are effective and efficient in your role, your boss may well consider this as a long-term option for you. Working from home is the new normal; put things in place to make it possible for you to do so.
Invest in yourself
You are your greatest asset; don’t relegate yourself to the bottom of your priority list. Bring yourself to the top because it is important not just for yourself, but for your children. Get the skills, qualifications, certifications that you need to perform at your best and earn those salary increases and promotions that you deserve. You need to be at your best to be in a strong position to set up your own business.
Another important money tip is to invest in a network of proactive ambitious people. People that support, encourage you and help you grow.
Don’t ignore your insurance
As a single parent, health, life, and education plans are crucial. Even if you feel confident that your children will be cared for (by their father or other relatives) should anything happen to you, do put firm arrangements in place for them.
If you are the primary breadwinner with dependent children, it is your responsibility to try to ensure that there will be some financial cushion; should you lose your job, become ill or in the event of your untimely death.
A life insurance policy will help to replace and protect your income. It will help prevent your children from becoming totally dependent on the goodwill of relations or friends. It can also provide legal guardians with the resources to care for your children and to ensure that they have the opportunities you would have wished for them.
By putting in place the right type and amount of insurance, you will have peace of mind in the knowledge that you are securing your children’s future.
Invest for the future
Even with the huge demands of single parenthood, you cannot afford to ignore your own future financial security.
The earlier you start saving for your retirement, the more you will have set aside to ensure a comfortable and secure retirement.
Estate planning is not a death sentence
An estate plan is more important than ever for a single parent. A will provides clear directions about who will inherit your personal property, bank accounts and investments. And also who will execute your affairs after your death. Carefully determine who would be capable and willing to assume responsibility for your children. Also ensure that they understand the full implications including the significant financial responsibilities that accompany legal guardianship.
Verbal instructions carry little weight. If you die intestate, everything involving your estate and your children will be decided by a probate court. Things might not be in accordance with your wishes. You may also want to consult with a lawyer about setting up a living will. This expresses your wishes if you become terminally ill or incapacitated. Also consult a durable power of attorney to empower someone you trust to carry out your express wishes.
Don’t spoil your children
For many single parents, especially following a divorce, there is a tendency to spoil children. With the societal pressure and the psychological pull of social media; it can be difficult to navigate the minefield of excessive buying and spending, particularly for your children. This can be very damaging to not only your finances but to their attitude towards money as well. You absolutely do not need entitled, spoiled children with all that you already have on your plate. Don’t feel guilty about not providing everything that they want. Encourage them to earn and to start to save some of their own pocket money.
Don’t be distracted by societal pressure
It is so easy to compare yourself to others and want to stretch yourself to try to do what you really cannot afford. An important money tip is to stay focused on your own goals and don’t get swayed by a need to keep up appearances.
With clear goals, deliberate planning, and proactive action to reach them, many single mums are living their dream lives. They are able to provide for themselves and their children, and are also able to afford some of the luxuries of life with a clear view of a life of financial security.
Also read: Money Matters – 8 Money Tips For Single Mums
Nimi Akinkugbe has extensive experience in private wealth management. She seeks to empower people regarding their finances and offers frank, practical insights to create a greater awareness and understanding of personal finance.
For more personal finance tips, contact Nimi:
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