The bills pile up and the kids want to be like everyone else and play sports and wear trendy clothes. I used to joke that I no longer had a pay day but a pay transfer day. My pay check went into my bank account and then was transferred to others, leaving me feeling broke. There are five things that can help a single parent build a financial portfolio.
This may seem like a simple thing and when it feels like there is no money to go around, budgeting seems like an impossible task. There are many apps and professional services that can assist with this. Ensure that you follow your budget; this may mean not eating out or getting coffee, and a change of eating habits. Look at having separate bank accounts, one for bills and one for discretionary spending.
Purchase life insurance
When living in the moment this seems like an impossible task but there are low cost life insurance policies depending on your situation. As a single parent you have children that you need to think about if something happens to you. They may be depending on your income and if there is none, your passing will make life harder on them – beyond the grief.
Create a savings account
Easier said than done, I get it. But putting a little away in an account that is not easily accessible can help in the case of a true emergency. If possible, have the bank automatically move the money into the account so that you don’t even notice it missing off your cheque. This could be as little as $10 a pay cheque.
Resist going into debt
It can be so tempting to take a loan, get another credit card or borrow money. This can backfire when the loan or credit card payment is due, and you now have an additional payment. This hurts your credit score when you have borrowed to much as well hurting your chances of succeeding in the future. It is best to keep your debt-to-income ratio at under 40 per cent. When possible get rid of the debt that you already have. Those who monitor their credit have a greater chance of financial success.
Plan your child’s future
There are many different programs to help with preparing for a child’s education. This could be a Registered Education savings plan (RESP). Other options include tax free savings account (TFSA) or bonds. Whatever method you decide, keep the payments going even when it feels like there is nothing to give. This will help you and your child in the future.
Getting through the here and now can seem like an impossible task. It will get better and planning for the future seems like a dim light in a large tunnel, but if you plan now it will pay off in the end. There are many who say to just find better paying jobs, or find an additional part-time job. This is not always possible as a single parent. Learning to control your money is something that you alone can do.