Here’s why single parents should be even more financially prepared, and how to accomplish it.
Research shows that 53% of working mothers in South Africa are single. Financial planning is one of the biggest challenges for single parents, but, says 1Life, this can be overcome through proper planning.
Here are some handy tips for single parents:
1. Plan ahead
It’s estimated that a state high school education will cost more than R42 000 per year in ten years’ time, and university fees well over R80 000. Start putting aside funds for your child’s education from the day he’s born. You’ll only have about six years to save before your child goes to ‘big school’, and from there it’s a quick 12 years to university or college.
2. Create a realistic budget
By drawing up a realistic budget, you can make a lot of daily decisions in advance to avoid overspending. Go to www.truthaboutmoney.co.za for free budget tools and support.
3. Put money away for a rainy day
Even if it is a small start, you should build up an emergency cash fund. Experts recommend that you have the equivalent of six months’ worth of income in this savings account. This cash reserve can keep a child safe if you lose your job or go through any other financial struggles. Don’t spend this money on luxuries, and only use it in case of an emergency. Replace the money as soon as possible when you need to dip into this fund.
4. Make sure you are financially protected
As the sole provider, you want to ensure that your child will be taken care of, no matter what. By taking out life cover, your child’s food, medical expenses, school fees, and other costs will be taken care of if anything happens to you. Do your research before deciding on a financial protection plan, and look at what your needs are. It’s also important to have a will in place, nominating a legal guardian for your child, if he’s younger than 18.
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