One of the most important things you have to do as a single parent is financial planning. In the hustle and bustle of raising your kids alone and holding down a job, financial planning is something most of us leave for “another day”. You can’t, it’s so important for your children’s future that you have to make the time to do it. Some things to think about are:
1. Manage your finances now, set goals, track spending and create a budget. This will help you establish a cash reserve to handle emergencies.
2. Start a college fund for each child. I know it’s hard to squeeze out any extra money but even a dollar a week will add up. Find out what state sponsored college funds you can set up for your children so their money can grow. The earlier you start the more money they will have thanks to compound interest.
3. Buy life insurance, how much will depend on your income level, debt load and number of children. A good rule of thumb is six to eight times your yearly income.
4. Disability insurance. This can be a life saver if you need to take time off due to illness or injury. When I had surgery Hailey and I would have been in real trouble if I had not purchased disability insurance through my employer.
5. Plan for retirement. It’s difficult to even think about yourself when you are so involved in raising your children and ensuring their education, but you don’t want to be a burden to them in your old age so plan accordingly.
6. Every single parent needs a will. Most people think you don’t need a will unless you have a lot of money, if you have children that could not be farther from the truth. In most cases if something happens to the custodial parent the other parent gets the children. You need to talk to your ex about this, is he or she in a position to raise the children, and if not, you both need to be in agreement about who will finish raising them if something happens to you. Appointing a guardian is important, this person will be responsible for the well being of your children, and managing any life insurance or property to leave to your children, until they are adults.
Don’t get to caught up in the day to day things that you forget to look out for your children’s future as well.