Single parents, especially in India, have a tough time managing the society, expectations, and finances. They have got the unenviable process of having to double up on all fronts and but lift on with a smile.
Raising children is one of the toughest jobs on this planet. If not the hardest–and more than 13 million parents do it solo according to a survey.
As income is particularly tight for single parents, it’s very important to let time go to work for you. Invest early to give you the best return.If a parent chooses to be more conservative, saving the money in things like guaranteed investment certificates (that have a low return at the moment but one that’s guaranteed, starting early also gives the interest on the investment more time to compound.
Monitor your current spending:
Chances are the bulk of your money is going toward housing, child care, health insurance, food, clothing and gasoline — but how much is going toward each category, and are there ways to simplify and cut back before all the money vanishes each month? To find out, scrutinize your spending over a period of two to three months.
Be upfront with your children. Have an honest discussion with them about the family’s financial picture — especially if you’re a suddenly single parent. They have the capacity to understand their changed circumstances and help the whole family curb spending once you arm them with the truth.
Insurance is a must :
Although it is important for all mothers and fathers to keep their estate planning in order and to maintain life and disability insurance, this is absolutely crucial when a person is a single-parent, since they are the only provider.
Parents should have a will, a power-of-attorney, and insurance that covers them in the event that they get sick or injured and cannot work.
They should also have life insurance and a policy that covers their outstanding mortgage balance.
Single parents also need to plan for their own retirement
Some advisers recommend they utilize a tax-free savings account, which does not offer upfront tax benefits allows the savings to be accessed immediately for emergencies. Money can be placed in a number of investment vehicles, including stocks and bonds, and accumulates tax-free.
Teach Your Children About Money:
“Conversations about money management are important, but they become that much more so in a single income household,” says Leslie Linfield, executive director and founder of the Institute for Financial Literacy. “Since a child with a single parent will have friends from two income households that can afford more, having open conversations can help ease a child’s negative emotions from not having as much.” Once a child understands a single parent’s financial situation, they generally want to do what they can to contribute towards the family’s financial success.
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