9 financial tips for single parents
Free Book Preview Money-Smart Solopreneur
Educating a child , financially speaking, is not easy, particularly for those parents who decide (or must) do it alone. Single parents have a double responsibility to balance the child's emotional needs with their financial demands.
“It is important to have a budget and a financial plan, especially if you are a single parent, because you are the biggest supporter of your little one,” says Clare Levison, financial planning specialist. “There are pros and cons; the 'con' is that you have to do it all alone, but the 'pro' is that you really CAN do it alone ”.
Here are some tips to plan for your future and that of your family.
1. Budget, budget, budget
When you review what you earn and what you spend, create categories for different payouts. Having a plan to consume less will also help you to be debt free.
Determine your fixed monthly expenses. These usually include a house, food, services, health, and everything you need to keep your life going. An emergency fund is used to cover unscheduled expenses, like car repairs, or to survive if you lose your job. "You need to have between 6 and 12 months of expenses saved, in case you do not have a second income to support you," recommends Levison.
Goals and priorities like retirement, buying a home, or your child's college tuition can be more easily achieved through different savings tools like mutual funds. There are platforms that allow you to start saving with 100 pesos a week.
Don't forget to plan for holidays and birthday gifts, but be careful with your prices.
2. Educate your children
Become a financial role model by setting a good example. Educate them about savings and explain the difference between need and want when it comes to spending.
“If you are a single parent with only one income, it is extremely important to help your children understand the needs of the home and how to plan for the future,” says Laurie Barry, UBS financial services counselor in Chicago.
3. Make "exchanges"
"When you're a single parent and entrepreneur, life is about tradeoffs," says Mullin. For example, even if you plan your meals for the week on Sunday, there will be days when you have to shop at a fast food place because you were late for a meeting. These expenses are not planned because you are exchanging money for time.
"Sometimes it is worth paying for some things that improve the quality of your life, but that means you will have to make adjustments in other areas of your budget," says Mullin.
4. Have an emergency plan
Having a family member designated who will take charge of important decisions about your child if it happens that you cannot do it yourself, is essential. Who will handle the money that you will leave them if you are absent?
5. Make sure
Protecting your family with life, disability and health insurance should have the same priority as saving. Life insurance will give your little one financial stability in the unfortunate event that you become absent.
What would happen to your business if you became seriously ill? Yes, there are insurance that can be expensive, but in the long run they can be the key to the well-being of your children.
6. Manage the pension
There may be times when the money that the other parent spends for your children is extra income, although most of the time it is a necessary capital that does not exceed. This benefit ends when the child reaches the age of majority, which does not mean that you will stop procuring your children as soon as they turn 18 years old. Also, this money can disappear if the other parent dies or chooses not to contribute (which is illegal, but it does happen).
"If you can, use the money the other parent sends you to feed your little one's savings fund," says Randy Kessler, founder of the financial agency Kessler & Solomiany.
7. Create a support system
Trading favors can help you save money. Create a support network of friends and family to help each other when needed. "For example, when children are young, babysitters can be very expensive, but sometimes your family members can help."
8. Build your career
Running a business when you don't have the direct support of a partner to educate your children can be scary. Doing so requires time and commitment, so you will need the help of your family and friends to care for your little ones.
It is also important to reduce guilt as much as possible. You are certainly not spending as much time as you would like with your children, but you are building their heritage. Do not forget.
9. Plan your time
That said, one of the greatest blessings of being an entrepreneur is the flexibility you can have in your schedules. The truth is that being able to play with your schedule and having the ease of working from home some days will make all the difference to start and enjoy your family as much as you can.