As a single parent, you have the challenge of taking care of yourself and your children without the help of a partner. This makes financial planning difficult, but with some preparation and professional assistance, it is possible to raise your children as a single parent while reducing your stress over finances.
Tips for financial planning for single parents
- Create a cash flow plan — Your cash flow plan is used to measure what you owe and what you are earning. You need to take into account all your income and earnings you expect on a regular basis and weigh that against your spending budget. This budget needs to include all expenses, such as housing, transportation, food, utilities, entertainment and daily expenses. Creating a cash flow plan helps you take all of this into account so you can picture what your financial situation will look like in the near future.
- Save for emergencies — An unexpected emergency can drain a significant portion of your funds. If you are unprepared, it can leave you in debt. Our team recommends setting aside at least three to six months’ worth of income in a savings account that you can easily access in the event of an emergency.
- Plan for health costs — Are you a single parent recently coming off a divorce or the death of a spouse? It is common to lose health insurance coverage after events like these. Make sure you factor health costs into your emergency fund to make sure you are covered in the event of a medical emergency until you can get the coverage you need.
- Keep on track saving for your retirement — It is easy to understand that as a single parent you are concerned about creating a secure financial future for your children. However, it is important that you do not forget about yourself. Continue funding your retirement account if you have one, and if you do not, we recommend opening one. Your children can still go to college with the assistance of grants, scholarships or loans, but you will have trouble being able to support yourself in retirement if your account is underfunded.
- Develop an estate plan — In the event of your untimely death or incapacitation, it’s important to have documentation in place that dictates what you wish to be done with your assets and how you would like your children cared for. This is what is known as an estate plan. It is more comprehensive and personalized than a will, it can take effect while you are still alive, and it is not subject to public scrutiny or a probate court’s ruling.
Talk to a ProVise CFP® professional about financial planning for single parents
At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can get to know you and your current financial circumstances, goals, risk tolerance and personal values to help you develop a plan that works for you. We can also create a written plan for you at a fiduciary standard of care. All our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid.
Are you ready to talk to a professional about financial planning for single parents? Contact ProVise today to schedule a complimentary consultation.