Financial Planning to Keep Your Child Protected
by Sara Bailey
When you’re a single parent, planning and preparation can make all the difference when it comes to caring for your little one. The same applies to your finances: careful planning can keep your family more secure, now and in the future. How can you start? Here are some important financial questions every parent should ask themselves.
Will Your Child Be Protected, No Matter What?
As a single parent, you are used to fiercely fighting for your child’s health and safety. But what would happen if you were no longer around to do so? Thinking of your own death is never pleasant, but if you really want to be prepared to protect your child, you have to give it some serious consideration. Planning your funeral ahead of time is a smart, not morbid, move for parents to make. This allows you to make tough decisions ahead of time, like whether you will be buried or cremated, and better estimate the total of your final expenses. Depending on your choices, an average funeralcan run anywhere from $7,000 to $9,000. Without pre-planning, those are decisions and costs that will only be passed on to your family members, during a time when emotions will already be raw. But final expenses and funerals shouldn’t be your only concern. You also need to have a detailed willdrafted, in order to ensure your child will be cared for if you can no longer do so. Also, look into life insurance coverage, so your little one will be financially protected. You can even sellyour life insurance later on down the road, if you need cash for unexpected expenses or if you simply have more coverage than you need.
Does Your Budget Really Fit Your Family Needs?
One of the most basic steps every parent should take when it comes to financial planning is to put together a realistic family budget. A detailed budget allows you to more easily track income coming into your accounts, bills that need to be paid, and any regular expenses. Sit down and go over recent statements, pay stubs, bills, and receipts that will help you get a better picture of your spending habits. Look for areas where you may be able to easily save in the future. For example, you can cut grocery expensesby shopping with a list, looking for coupons online, and choosing savings over convenience. If you can manage it, do leave some room in your budget for entertainment and fun. Look for budget-friendly activitiesso that you can still spend quality time with your child without worrying about extra expenses. Growing a garden together is a good way to bond with your child, and planting an edible garden can even help you save money on food.
Are You Really Saving Enough for Your Future?
In addition to expenses and income, parents should also include some financial goals for the future in their new budget. A college savings plan usually tops the list of financial priorities for parents. While saving for your child’s education is definitely important, there are some other things you should consider saving for first. Before you save for college, you should try to deposit money into an emergency fund so you can be prepared to cover any unexpected health issues or home repairs without disrupting your finances. If you have debts, you should try to pay those off as well, and repair any damages to your credit. Many parents neglect this important step, but your credit scorecan impact your ability to save for the future and secure a good job or even housing for your family. Once you have your credit worked out and a basic savings plan established, you can start putting money away for other future aspirations, like owning a home or staying comfortablein retirement.
Being a single parent can be challenging, but the right financial plan can make your life so much easier. So, if you have not started yet, sit down and come up with a budget, start your own savings plan, and really plan for whatever the future may hold for your family.
Photo Credit: Pexels