I have great respect for single parents. I have friends who raise a child or an entire brood by their lonesome, and I have seen how hard it is. Some of them are single parents by choice (through separation, adoption, and IVF), but others became so because their spouse passed away.
Single parenthood is challenging, as single parents often have to deal with emotional and mental distress. Most of the time, however, they put their personal concerns on the back burner to turn their attention to more pressing matters. Topping that list would be money.
Single Parenting Facts and Figures
Out of over 2.3 billion children in the world, 14%, or 320 million, are living with single parents, most of whom are moms. Many of these single-parent households struggle to make enough income to sustain the family’s needs.
The Center for American Progress (CAP) reports that single parents are more likely to live in poverty than married couples. It’s easy to see why: A family with two to four young children of schooling age can live more comfortably on two combined salaries than on just one. In the U.S., only 7% of employed, married couples are earning less than $40,000.
Moreover, money is always relative to geography. This means $40,000 in New York is worth a lot less than, say, $40,000 in Alabama. Still, it doesn’t remove the fact that single parents anywhere in the world tend to struggle more, financially. In Australia, for instance, a government agency found that divorced parents have 36% fewer assets than married respondents.
These are the realities single parents live with today. But instead of focusing on the numbers, this article will focus on possibilities.
Below are recommendations from single mothers to other single mothers – tips on how to earn more, have better control over your money, and eventually enjoy financial security for yourself and children.
5 Ways Single Parents Can Be Financially Secure
#1: Invest the money from your settlement.
If you’re coming from a divorce, you should consider investing the settlement you received from your spouse. You might have to spend for immediate needs, like putting a down payment on a new house, renting a new apartment, or paying off legal fees. However, it’s best if you can set aside a reasonable sum for investments.
If you get a big enough settlement, you might be able to afford the deposit for a duplex, a single-family detached home, or a multi-family building. If you can prepare and rent out the units soon after, you may have enough to pay the mortgage and taxes every month and have some left over for savings or your family’s expenses.
Stock investments are also an option. Keep in mind, though, that this is a long-term investment and probably not the best choice if you need to pay for something soon, like your children’s school fees. Also, remember that you only get sizable dividends if you buy more stocks.
With these in mind, investment portfolios are ideal for single parents whose children are grown or about to go to college. You’ll have less financial responsibilities by then, and it’s a period when you may once again focus on yourself.
#2: Find a job with long-term security.
It could be challenging to find gainful employment as a single mother, especially if you’ve spent your marriage as a full-time housewife. There’s a good chance that employers will question your skills, as you’ve been unemployed in the last couple of years. You’ll also have to compete with younger job seekers who have more time and energy to dedicate to the job.
The fact remains, however, that you need a job. If you already have one, re-evaluate your position. If it doesn’t offer you the job security or opportunities to scale up and earn more, you better start looking for one that can give you both.
Be tenacious about finding work. If hiring managers overlook your application because they doubt your qualifications, seek other methods to get in touch with potential employers. Create a profile on LinkedIn and send applications to recruitment firms. Don’t be ashamed to ask for your friends’ help or tap their connections.
#3: Find a good health care plan for yourself and your children.
A single night spent at the hospital can easily cost over $1,000, even with insurance. Imagine how much it can cost out of pocket if you have no health insurance at all.
You can protect not just your children’s health, but also your financial security by finding a good health insurance plan. There are several ways to go about this.
First, if you’re employed, you can ask your HR to include your children as dependents covered by your HMO. If your company doesn’t offer HMO, speak with your HR about how you can cover your children and how much it would cost you to do so.
Second, you can shop for health care plans at the Health Insurance Marketplace. The good thing about this is you can personalize the health care plan for yourself and each of your children. You won’t need to pay the same rate for your child with a health condition and your other child who has a healthier constitution.
If you’re earning more than the Affordable Care Act’s income threshold requirement, however, you’ll have to look for health care plans outside the Marketplace.
#4: Find cheaper alternatives wherever you can.
Single mothers who’ve been rocking the role for years are no stranger to cutting costs and finding ways to save on everything they can, down to the last penny. From their preference in clothing brands to the coffee they drink, if it’s a downgrade they can live with, they’ll do it.
Consider what you’re getting for the additional expense on a product or service. If you only get a marginal advantage for a $10 price increment, you’ll get better value for your money if you go for the less expensive option. For example, you can buy a pound of Atlantic mackerel for about one-third the price of a pound of salmon. They may not taste exactly the same, but you can get significant amounts of omega-3 fatty acids from both types of fish.
Remember that an expensive price tag doesn’t guarantee quality. Be a smart buyer, and you’ll succeed at reducing your expenses.
#5: Save for Christmas.
After working hard all year, scrimping and prioritizing your children’s needs over yours, you deserve to have a joyful Christmas, Hanukkah, Kwanzaa, or whatever celebration you observe. It could cost more than you usually spend each month, so, as much as possible, start saving for it as early as you can. Here’s how you can do it.
List the things you want to have for the holidays in order of priority. Let’s suppose you want to give two gifts for each of your children, a Christmas tree, a stuffed turkey for dinner, and home-baked cookies and brownies for the kids to enjoy on Christmas morning. Next, write how much you need for each item. Doing so will give you a clearer picture of how much the holidays is going to cost.
Put in your “Christmas Fund” what you can each month and work your way through the list from top to bottom. You can also show the plan to your kids so they can help you save.