When we think of financial freedom, we often visualize someone who is living their best life with a complete family. It is often a visual right out of a “Happy Family” portrait. Of having it all. But, sometimes, life has different, more adventurous plans. Some of us, find ourselves as Single Moms, with almost never enough time to cover all the bases, carrying emotional baggage and financially stuck.
But not everything needs to be out of our control. Often, taking control of one part of our lives, has a spiralling effect on all other aspects of our lives.
If we just decide to manage our financial lives with the following 5 steps, we could quickly move into taking charge.
1) Budget, budget, budget harder — how much is coming in, how much is being spent & bucketising our expenses into fixed/ variable
2) Build an Emergency Fund — now that you have the responsibility of taking care of your kid/s, before any other form of investment, a readily available corpus of atleast 6 months of monthly expenses should be created for any unforeseen circumstance. Do not compromise on this.
3) Get a Term Life Insurance cover — As a single parent, one often feels the burden of caring for their child alone. While one of the greatest fear of any parent is to leave behind their little one uncared for, this feelings gets exemplified multiple times as a single mother. To manage this, buy atleast 10x cover on your annual income, any debts you currently have, and future costs of your child’s needs (incase they are young)
4) Get a helping hand — Actively seek investment advice from qualified professionals. Since you already lack time, seek support to ensure your financial future is secure through a portfolio built on mutual funds and fixed income instruments like PPF,NPS,etc. Get someone who is trustworthy, experienced and schedule quarterly meetings to review, revisit and learn. In parallel, invest in educating yourself on finances as well. It’s a life skill critical to you & also for your child to imbibe.
5) Clean up the paperwork — Ensure all your financial and real estate investments have clear paperwork with clear titles/ nominations mentioned for your child. Have a confidante/godparent/guardian with whom you can share all this information with complete trust. As a single parent, it is essential to be prepared with a support system.
The above 5 steps are only baby steps in the long journey which single moms undertake to provide the best life to their kids & themselves. Our choices define who we become.
Be your best self to lead your kids by example.