Education, groceries, clothes and entertainment are some of the costs that parents must provide for their children. However, for some single parents the weight of expenses can be immense because they only have one income.
Eunice Sibiya, Head of Consumer Education at FNB, says “As a single parent, it would be helpful to have a plan that can help you during times of distress, primarily because all the expenses that would ordinarily be split between two parents will be handled by one person. Not only is this emotionally taxing on the parent, but the children as well because there is a lot they may have to forgo just for the family to stay afloat. As a way of alleviating the pressure, single parents have to be more diligent about how they handle money.”
“Even though some single parents may be faced with various financial pressures, they still need to cater for long term financial planning such as education and retirement.”
There are no quick fixes, once you realise that you are buckling under pressure you need to immediately take steps to remedy the situation:
Talk to your children
If your children are at an age where they have a basic understanding of money and what it means, have a frank conversation with them about what you can and cannot fulfill. Once you get into a habit of being open with your finances to your children, they will most likely begin to understand the family situation. This is also an opportune time to teach your kids about the importance of saving.
Be aware of where your money goes. To achieve this you have to keep an eye on your spending patterns, when practiced consistently you will be surprised how easily you are able to spot wastage. Remember wastage must be dealt with no matter how small; if you are spending too much on pocket money for the kids, supplement this with a home packed lunch and you will see the difference.
Be honest with yourself
Your income will largely determine the type of lifestyle you lead, but remember with the added pressure of being a single parent you may be forced to consistently assess your lifestyle choices. For example, while you may want to buy a newer car model, rather delay that and put that money aside in a savings account for emergencies, it may come in handy when you suddenly need money.
Cater for major life events
Make room for retirement savings. You must have money put aside to ensure that when you retire you will not have to be financially dependent on your children. If you have not started saving for retirement, start now because it’s never too late. Another important consideration to make is life insurance; make sure that you have life cover to safeguard your children’s financial security in the unfortunate event of your death.
Most people delay saving for retirement and buying life insurance, the truth is both are inevitable and delaying both can be costly.
“Being a single parent is by no means easy, the trick however is to ensure you spend wisely and have a firm grasp of your financial situation,” adds Sibiya.