Financial planning is unarguably a critical aspect of everyone’s life. After all, who doesn’t want to enjoy life without having to worry about financial provisions? But the importance of financial planning heightens if you are a single mother.
There is no doubt that being a mother is the toughest job in the world. As a mother, you juggle multiple responsibilities, from providing for your child’s day-to-day requirements to inculcating the right values. Over and above everything else, you need to safeguard your and your child’s financial future.
The financial challenges of single mother’s stem from the low level of literacy and awareness regarding money management in the country. This is especially true for women, the majority of whom are kept out of financial discussions resulting in increased unawareness and dependency on parents or spouses for money matters. In cases where they are separated, they are rendered helpless. The situation worsens when they have kids to take care of.
Having a savings plan can go a long way in helping you provide for emergencies and your future needs. If you are a single mother facing issues managing and saving money, then we’re here to help. Here are some financial tips for single mothers to help you get started.
Protect Your Child’s Future
One of the most important financial tips for single mothers includes buying insurance. You don’t want your little one to be financially clueless when you are not around. You need to meet various needs of your child such as their health, education, marriage, etc. With meeting your child’s future goals being your priority, insurance will help you fulfil them as it covers your child financially in case of your unfortunate death.
Make a Budget
Being a single mother, you need to get a grip on your financial situation. Instead of stressing yourself out by aimlessly searching for ways, make a note of your present financial state, current needs, and future goals.
Are you earning? Do you have any debts on you? What about your household expenses? Ask yourself these questions. Start with your income if you are a working woman. Then, factor in daily expenses that involve provisions for you, your child, and any other dependents you have. Move on to include fixed expenses like rent and utility bills, as well as any debt you must repay.
Now, go ahead and list down your future financial needs. This includes paying for your child’s higher education as they have now grown up, provide for their marriage later, save for health emergencies, etc. Consider the inflation rate also. For instance, your child’s education cost might increase in the future with the rising inflation. This will give you an estimate of how much money you will need now and in the long run.
Increase Your Income
Once you have an idea of your present financial condition along with your short and long-term financial requirements, you need to move on to the next step of financial planning.
First, weigh the needs you noted down against your monthly income. Is it enough to sustain your everyday requirements and help you save some money at the end of each month? If the answer is yes, then enhance your already promising career by working hard and growing professionally to provide better for you and your child.
If not, you might want to look for ways to enhance your regular income. This could mean switching your job or doing some part-time work. If needed, consider changing professions.
Invest Your Money
Investments make an essential aspect of your savings plan. Let the money you earn work for you by parking it in investment instruments best suited for your goals. Today, you have a plethora of saving tools right from the
stock marketand mutual funds to a savings insurance plan.
Keep your goals and risk-taking capacity in mind while choosing your options. For instance, equity stocks are considered risky investments but also provide potential returns, while debt instruments carry low risk. SIPs offer a disciplined and goal-based way to leverage mutual funds as a single mom.
If you are not sure where to start, take the help of a professional to kick-start this important part of financial planning.
Don’t Forget Yourself
While giving your child the best of everything, don’t forget yourself. Ensure your savings plan includes money for your life goals. This includes things like buying a house and a vehicle or preparing for your golden years of retirement.
From mutual funds to insurance plans, there are various investment schemes available to help you achieve your short-term and long-term goals including retirement. You can also take advantage of any policies offered by your employer.
Set an Example for Your Child
You might have started with little to no knowledge about financial management. But you don’t want your child to be in a similar position as you. Don’t only teach them the importance of a savings plan but also involve them in money matters and discussions.
When they are young, you can encourage them to save through games or by treating them when they accumulate a certain amount. Let them handle their finances post a certain age under your supervision. This will help them be in a better position to manage finances when they grow up.
These were some financial planning tips to help you through your journey as a single mother. If it feels overwhelming, don’t hesitate to get professional help.
L&C/Advt/2022/Aug/1909
