There are incredible moms and dads all over South Africa, and the world, who are doing a great job raising their children by themselves. They often face the challenge of doing all of this on a single salary. This causes a financial strain and can be overwhelming, but there are a few ways to take control and own your financial freedom.
1. Get financially savvy
As a single parent, you are the financial manager of your family’s wealth. Think about your money as being directly related to your ability to provide for your children and so, knowing your way around the financial side of things becomes immediately important.
Some ways to get financially savvy:
- Ask for advice: speak to a financial adviser, ask friends, or find a financial role model. Even better, ask your parents for tips, they’ve been through this journey too;
- Learn the lingo: there’s nothing more empowering than education. Learn what terms mean, and you’re guaranteed that concepts like inflation, investment and insurance won’t scare you anymore;
- Read a book: there are so many great books out there from single parents, financial advisers, and just generally financially savvy people. There’s bound to be a few you can relate to and learn from
2. Budget, budget, budget
Having a budget will help you plan better. You’ll be able to see your money, how you intend to spend it, what your expenses are and then what’s left over for you to save or invest.
A budget will help you stay clear of debt because you’ll be able to see upfront what money you have available to you once you’ve paid off your expenses. Do try and save between 10 and 15 percent of your salary – so try your best to work that into your budget.
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3. Protect your children’s future by protecting your assets and income
Taking out life insurance can help you make provision for the costs of raising and educating your children should something happen to you that makes you unable to support your children financially due to illness, injury or death. When considering life insurance, think about your cover in terms of both your income needs (to cover your living expenses) and asset needs protection (to pay off debt and secure your major assets).
It’s best you speak to a financial adviser about finding a product that allows you to tailor your cover to your specific needs, and will allow you convert your cover should one of your needs fall away – such as your children becoming financially independent.
When you’re ready, consider investing some of your savings. It’s best to speak to a financial adviser to assist you with finding a portfolio that will work for you and your children’s needs.
Some things to think about when considering investing: what will you invest in, for how long, what will give you the best returns (short-term and long-term) and most importantly, why are you investing?
In the end, it’s all about getting your money to work harder for you, and getting you a little extra time to spend with your children, and sneaking in some you time.