Single Parenting – Is Financial Security your biggest challenge?

Updated: Jan 26

Managing finances and expenses are always the core for any family even if both the parents are working. With ever increasing demands of the family, it becomes extremely difficult for ends to meet, if the same is not well planned. One will find struggles in normal families, then imagine when single-parent families are at a financial disadvantage as they have to manage everything in one income. It would be extremely difficult and stressful living paycheck to paycheck.

Financial Security being the key one was always on top of the list for me. As a Single parent you need to take care of all needs right from rent to daily expenses and many such miscellaneous ones which keep piling on an ongoing basis. Without proper financial support, it may become a nightmare.

My mom was a strong believer of saving today for a better future tomorrow. She used to always say “Whatever be your income, always save half of your earnings and learn to manage in the other half”. Her words have been a constant reminder to me throughout my life. Hence, I had got into the habit of saving early in my age and these learnings helped me during the difficult phase of my Single Parenthood. While I provided the best for my daughter, any of my not-so-urgent expenses I kept pushing it for later and planned my finances well in advance including keeping aside an emergency fund.

Few simple steps which I followed till date:

· Review Bank Statements: It’s never too late, work backwards. Refer to your last 6 monthly bank statements. Bucket all your debits into mandatory, voluntary and mis-used expenses. Mandatory ones are most important ones which needs to be incurred either this month or periodically like rent, groceries, school fees, repairing house gadgets, etc. Voluntary are the ones which are not immediate expenses, which can be controlled or can be avoided for certain period of time like buying shoes, new phone, etc. Mis-used are the ones which can be definitely avoided or met once enough cash is at hand like frequently eating out or ordering outside food or buying unwanted good to have items. Start tracking your expenses on monthly basis and check how much cash did you mis-use during the last 6 months and try to avoid them going forward and start saving the same amount. Depending on how much cash you save at month end, try investing the same amount at the beginning of the month, so you will get into the habit of saving first and then spending.

· Avoid Credit: As much as possible always use the cash in hand. Try avoiding credit cards as much as possible. While going shopping always leave your credit card behind. Even if used, always use it as if it’s your debit card and make the payment as soon as possible in full.

· Insurance: Take enough insurance life and medical for self and family. Try to pay the premium on monthly basis. If not, depending on the premium to be paid annually, start a Recurring Deposit (RD) account of equated amount so that next year instead of paying the premium from your current salary, the RD account will help these additional payments.

· Emergency Fund: Keep aside some emergency fund at home and keep your children informed about the cash to be used. Try to keep this cash handy in some piggy bank, which can be accessed only by breaking it, in order to avoid reaching out to this cash easily.

· Discuss monthly budgeting with your children and include them in your decisionsso they are well aware of the situation and it will be valuable learnings at an early age.

Golden Rule: Always live below your means. Save first then spend.

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