For single parents, raising their children into responsible and qualified individuals can be a daunting task, one which is full of responsibility and pressure. Not only from the point of view of finances but also from the point of view of the emotional journey, the ride for single parents is tough. The thought of late payments and debt piling is stressful(find extra resources here).
Financial backing and proper planning is thus extremely necessary for every person who is a single parent, a father or a mother. The following are some of the most effective financial advice and tips for single parents:
Emergency Funds
One of the most important tips for financial planning for single parents is to have an adequate emergency fund that acts as a safety net for times of need. When you collect and save money in advance, it can prove very useful in the future and can act as a life saver.
Estate Planning should be the First Priority
You must contact an estate planning lawyer so that you can setup your will and your estate funds which can be of use for your children if you die. In this case, you will have to name a guardian and set aside a power of attorney.
Have a Cash Flow Plan
If you have a cash flow plan and decent lifestyle habits, then there will be enough cash flowing for you and your child in the future. You must regulate your different streams of income and have them well organized so that you may not have to worry about financial security in the future. For this, you can bring down your expenses and invest in good bank investment plans.
Set up a Trust
You can also set up a trust for your children as it will act as a legal structure in which your assets can be held for the children and such a trust is overseen by a trustee.
Purchase Life Insurance
Life insurance can be extremely important for single parents. For this, you may need some planning and some calculating. You can also choose a term policy as it is pure insurance.
Prioritize your Retirement Savings over Education
When it comes between the choice of retirement savings over education, you must prioritize your retirement savings over education. Your earning capacity may diminish over time but your children can still go to college on an education loan or through a scholarship or a grant.
