Parenting is a responsibility cherished by most parents. However, given the difficult economic situation that the world is facing today, most parents would agree that bringing up children is becoming tougher day by day. This is more true in case of single parents where one parent has to single handedly take care of his or her child. Considering the increase in divorce rates in India, the trend of single parenting is on the rise. This has led to most single parents working hard to compensate for the loss of their spouse’s support in bringing up their children. However, in between hectic work schedules, they often find themselves in the dark when it comes to financial planning.
Given below are a few tips to help the single parents with their financial planning.
Awareness is the Key
Being aware of the financial requirements to raise your children and planning accordingly is essential for effective single parenthood. Single parents often tend to ensure that their children do not miss the presence of the other parent by buying expensive gifts and clothes and fulfilling all their wishes. This takes a heavy toll on the financial balance, often leading to a debt trap. Therefore, even when you express your affection towards your children by obliging to their demands once in a while, it would be helpful in the long run, if you can make them aware about your financial limitations at their early age.
Prepare Your Monthly Budget
The first step in ensuring a stable financial health of your family is budgeting. Prepare your monthly budget keeping in mind your income, expenses for the month and the saving that you wish to have at the end of the month. It may not be possible to lower your fixed expenses such as home rent or electricity bill. However, you can definitely cut down on your variable income such as money spent on fuel, entertainment or travelling by having a properly planned budget chart ready at hand, a sample of which is highlighted below.
Attain a Stable Income
To ensure that you have a steady income, you may have to resume working or take up further education to establish a career. Make sure your child understands the importance of your work and ascertain how he or she can support you in carrying out your daily chores. If you plan to pursue higher education, make good use of the scholarships or educational grants to support your educational expenses.
Single parents also have the option of considering additional sources of income such as receiving alimony and child support payments from their separated partners to meet the expenses of self and child.
Foresee and Plan Your Child’s Future
Providing your child with the highest quality of education that you can afford is the first step in shaping your child’s future. Be wise enough to foresee adverse events such as an illness or even your untimely death that could affect your child’s future and plan accordingly. Make sure that you have an insurance coverage for yourself and for your child and make your child the beneficiary of your insurance amount in case of your untimely death.
Bring awareness among your children about the importance of money and develop earning habits in them by giving them allowances in return for their help in doing household work. You can also encourage them to open their own savings account and invest the money earned for their future education expenses.
Review Your Finances
If somebody is recently separated from his/ her partner or widowed, it is advisable to have a good review of their financial documents. Important documents such as those concerning your property must be registered with registrar office after consulting with your attorney. Make sure your preferences are updated in the documents.
Also if you are a working parent, have a good understanding of your retirement plans, mutual fund investments and tax benefits that you can obtain as the knowledge would help you to plan well to secure the future of your child.
Limit your grooming and entertainment expenses. Look for promotional offers and use discounts and frequent customer reward points at your local stores. Make sure to do bulk shopping rather than doing several errands to reduce your fuel expenditure. Do not hesitate to bargain while also keeping an eye on the quality of the items purchased.
You can also save some money by buying used items such as toys and story books for your child. You can also earn money by selling household items which are no longer of use to you but beneficial for someone else.
Single parenting is indeed a challenging task. However, it also provides you the opportunity to become more responsible about bringing up your little one. Proper financial planning ensures that your child is raised up with minimum concerns and gives you the freedom to enjoy single parenthood.