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Top 10 Personal Finance Tips for Single Parents
The economy always works in cycles, and with these cycles our perceptions about money, how we should deal with it, and what our responsibilities are towards accurately informing our children about it also change.
A March 2012 survey suggests that more parents are talking with their kids regarding money. Parents are discussing with children what they need to understand about it in order to make more informed choices on money matters as they grow older.
The current generation of students, or those who are in the initial years of their careers, are deep in student debt. I believe that one can avoid student debt if parents play their finances a bit more safely and carefully craft the financial future of their kids. Parents, though, can sometimes be poor role models when it comes to managing money and teaching the same to their kids. However, even if you are a single parent with limited means, it is still possible to take stock of things and enforce good financial discipline to achieve a secure financial future for your whole family.
Here are my top 10 practical tips to prepare a secure financial future for you and your children:
- Kids usually approach their mother first on money matters, especially when it comes to seeking advice on how to save. So if you are a single father, chances are that your child may not approach you easily on this. Better prepare yourself and learn to direct the conversation to money matters and encourage your kids to speak about this more openly.
- Increasingly, single moms are not using bank accounts and are adapting other pricey alternatives to fulfill their banking needs. Having a bank account opens gateways for you to access other financial products to fulfill your financial needs. So, open a bank account if you don’t already have one or start using an existing one again.
- You will not need a budget if you learn how to pay yourself first. However, do budget for extra expenses related to raising your children, such trips to museums and other entertainment activities. Beware of spending too heavily on video games!
- Avoid taking loyalty cards and coupons from superstores. They are meant to save you money but at the same time they force you to spend more as well.
- Set up a life insurance policy and any other relevant insurance plans. If you are the sole breadwinner for your entire family and your children are still too young to work, it can help a lot in case of any emergency.
- Automate your savings and set savings targets to accumulate. Many banks offer savings or e-savings accounts, so set up smaller weekly automatic transfers. Start slow and build your savings bucket with smaller weekly contributions rather than making one large monthly payment.
- Start saving for your children’s college expenses early as costs of education are increasing fast. I always suggest that the best gift you can ever give your kids is to pay for their tuition fees. If you are living in the US, you have the option to invest in 529 savings plans, but do check state-related conditions. Costs and conditions vary from state to state. Saving through a Roth IRA is another option for you. The trick is to start early—starting from the first birthday of your child.
- Teach your kids how to be self-sufficient by earning through doing small gigs such as selling candies to other kids in the neighborhood.
- Take time and review your net wealth and financial position at least once a month. Don’t stuff your shoe boxes with receipts, but rather focus on where your money goes and where you stand in terms of your net wealth.
- Family is always the first priority.
Starting early and becoming aware of balancing your and your kids’ financial needs is the key to achieve much desired financial discipline. A small amount of time invested in observing your own attitudes and behaviors regarding spending money can set up a solid financial future for you and your family.
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