In the modern times, the ratio of singles parents is increasing. The need for self-freedom and the urge to live life on self-terms has however led to a major increase in this ratio. Couples today believe in self-worth and independence more than sacrifice. Even though it’s said that the children suffer the most in such cases, but you cannot deny the fact that both the individuals do suffer a lot both emotionally and financially. Financial stability is affected the most especially in the initial months after separation as the income sources are either totally gone or almost half. It becomes very difficult to manage expenses in such situations with a tight budget. Single parents go through various problems some of them are.
No emergency funds: as a single parent the sources of income are very limited, and all the earned income goes into buying day to day necessary goods and payment of utility bills. The scope for savings is very low wherein it is quite challenging to save money for emergency situations.
High expenditure on childcare: as a single parent in the majority of the cases there is no one to take care of the children while the parent is busy working long hours in his office. In such cases, daytime childcare centers are the only option where a child can be kept. Childcare centers charge a lot, and a major chunk of the salary goes into paying the childcare fees which earlier was not included in the expenses list.
Failure in maintaining a balance between professional and personal life: Many single parents, especially in the initial months of living as a single parent, fail to maintain a balance between their work and personal life. It is often seen that single parents work long hours in order to earn more or they may even work for too many hours at home. This spoils the personal and work life balance and can also affect the financial decision making the power of an individual.
Fewer chances of getting loans and credits: when an application for credit or loan is made the chance of approval are high when there is a co-applicant added who has a fixed source of income. But when single parents apply for the same the chances of credit approval is quite low as the income is very limited and banks are not in favor of it.
Even though working as a single parent is very difficult through effective measures, and proper analysis of income single parents can achieve financial stability and also save for retirement. Here are some tips to maintain financial stability:
Analyzing self-financial conditions: the first and the basic step is to analyze the current financial situation. You can either do this by taking financial help or my just maintaining a regular diary wherein you maintain details about your day to day and future expenses and sources of income. As per the amount of debt or expenses the future financial planning can be done. In this way, you get a better idea of where to spend when and on what!
Generating a passive income and utilizing assets: a single parent’s income, however, fails to meet up the balance between savings and expenditures; in this case, it becomes necessary to have a source of passive income. Today there are various opportunities to generate a passive income online unlike the olden days. Passive income can also be generated through investments and assets if any. If your posse’s assets like a house or a shop then you can rent the shop or put one part of your house on rent to generate a passive income.
Getting financial guidance: as a single parent if you are already in debt and just managing to make the ends need then you need professional help to manage your expenses and also your debts. There are several apps today that assist you in doing so, or you may also seek guidance from leading online debt management companies like nationaldebtreliefprograms.com. These companies charge a small percentage of commission, but it is justified from the returns you get. You can also hire a skilled attorney in case you cannot effort professional consultants.
Avoiding unnecessary expenses: as a single parent when you are already on a tight budget, you should make sure that you stop spending on unnecessary or unwanted goods. Also, try to use local brands instead of branded goods wherever possible; this will help to save alot. Spending on fancy products and self-luxurious should also be avoided. Through this, you will save little per month, but over a period of time, it will turn into a handsome amount. You should always be on the lookout for online deals before buying anything. Websites such as DontPayFull provide up-to-date coupons that might save you a good amount of money.
Apart from the above, there are there are many other factors such as finding pocket-friendly substitutes for both childcare and clothes can also save a lot of money.
How can single parents save for retirement?
Yes! As a single parent, you can save for your retirement too. Here is how –
Work for a retirement friendly company: always choose wisely when you are choosing a company to work with especially when you are a single parent, and you are in your forty’s. Always choose companies which provide you retirement benefits and pay high pensions.
Long-term Investing: learn to make small investments in shares, mutual funds, government bond, etc. since day one. As in the early years, your return on investments will not be much, but till your retirement, you will have enough to be self-sufficient. The share market being so unpredictable you can even expect ten times more returns on your investment if you invest in a right company and keep your money involved in it for along time.
As a single parent, it does become very difficult to manage the Childs expenses and responsibilities with a limited income. But it is very important to work on the problem areas, and through proper analysis and financial guidance you can achieve and maintain your financial stability.