The Importance Of Financial Planning For Single Moms
Kiran was worried to step into the new world of being a single mom.
“How scary it could be to take the responsibility for yourself and your kids alone?” The only thoughts that were running through her mind.
She always felt so comfortably independent and strong, only this time she could not find any path and was a little lost. With all these overwhelming thoughts she was not able to sleep and finally got up. Called her mother who was a single mother later, when his dad passed away.
What possible advice her mother has given to her, that finally put her mind at ease? It is all mentioned below.
Why single moms need to be financially backed up and strong?
Being a single parent can be a consequence of choice or necessity, but there are hurdles in both cases. As they attempt to manage jobs, life, and raising children, many single moms endure prejudice and resentment. Maintaining a successful hold on your money might make the process go more smoothly.
As a single mother, you must constantly make strategic decisions throughout the parenting cycle to ensure the safety of your kid. Being a single mother is difficult on many levels, notably financially. Financial planning and increasing wealth might seem unattainable when you have a low salary, hefty child care costs, and just never debt.
It might be difficult to plan your finances carefully today for a pleasant future for you and your children, and things only grow more difficult for single moms. You’ll need to make well-considered decisions at every level, from addressing your essential needs to raising self-sufficient children. As a single mother, you wear several hats while raising your children. Because your children rely on you for everything, irrespective of your relationship or financial position, you have various responsibilities. One of your most important obligations is to secure your and their financial futures via sensible budgetary and investment management.
Here are a few budgeting tips for single moms who want to make the most of their income and be financially secure.
1. Investing in short- and long-term investments.
There are types of mutual funds that provide a variety of product categories that are suitable for diverse investment horizons and are simple to invest in. These recurring monthly investments act as vehicles for long-term wealth growth as well as laying the groundwork for a future economic outflow, such as loan repayment.
Another long-term objective is retirement planning. A corpus may be built by investing in a savings and investment plan, and the lump amount could be used to buy an annuity when it matures. There are instant and delayed annuity programs available, and one can select one based on their anticipated age of retirement.
2. Funds for Emergencies
As a basic guideline, everyone must have emergency savings in the form of a regular saving account at all times. This might be similar to 3-6 months’ pay, and the fund’s size should grow in line with growing monthly payments. The goal of this investment is to offer stability in the event of a fiscal crisis that may affect the family. The loss of employment, an injury, or other unforeseen events may result in expenditures that your pay alone will not be able to cover. Attempting to channel funds by investing or saving in a different account may be a smart choice.
Other options can be managing Liabilities, Insurance, making a will, Tax advantages, Often having a budget, and an estate strategy to safeguard your children.
Single moms are strong independent women who manage several duties at the same time. Only you can choose the best methods to budget, consume, and manage your money to achieve your financial objectives. After you’ve conquered your day-to-day money, direct your attention to your 2 significant long-term economic stability goals: retirement and your child’s education The fact of the matter is that by making educated selections, you should be able to construct a strong financial strategy. As the only leader of your home, you will need to figure out how to pay off your bills and save some money. Seeing you maintain your funds wisely can motivate your kids to do the same.
How much money should single moms normally save?
It is said to save at least 20 percent of your income. This law expresses that you may spend up to 50% of your monthly income on necessities such as food, housing, medical costs, education fees, and so on. While 30% of your salary can be set aside for consumption spending, the remaining 20% should be saved.
How can you get free money?
Government or some NGOs sometimes do provide some beneficiary assistance. There are some options where financial institutions provide loans on minimum interest.