Life’s not easy for anyone, but it can be extra tough for single moms – especially when it comes to navigating their family’s finances.
One international STUDY by Marripedia found that children raised by single mothers were up to seven times more likely to be financially vulnerable than those raised in married families; and that single mother-headed families had a significantly lower net worth than that of married parents, stepfamilies and even single fathers.
Closer to home, recent research demonstrates the impact of unforeseen events on single moms, with the Momentum/Unisa Household Financial Wellness Insights revealing that women were hardest hit by lockdown, with more than a million losing their jobs or unable to work.
Robyn Edwards, Marketing Manager at Metropolitan, says that her experience as a single mom has taught her that it is even more important for those who are financially vulnerable to get a handle on their finances.
“Mothers can find themselves in a position where they are solely responsible for their families for many reasons, such as the death of a partner. As the heads of their households, single moms are also very often the sole breadwinners, and face a great deal of pressure to make ends meet and provide for their families.
“It is important to have a solid financial plan and a rainy-day fund in place, which will help you navigate whatever curveballs come your way.”
Edwards shares a few tips to help single moms take control of their finances.
It all starts with a plan
As a single mom with a lot on your plate, there is probably not much anyone can teach you about multi-tasking, ball-juggling, or planning with military precision. All you need to do is to apply that same focus to your finances, says Edwards.
Start with a plan. Draw up a monthly budget with your income and expenses listed. The amount by which your income exceeds your expenses, if any, is the amount you can afford to save. If you do not have enough yet, consider being stricter with the money you spend by cutting back on luxuries.
Next, define your savings in terms of short, medium- and long-term goals. Says Edwards, “You might want to take the kids on holiday somewhere, as an example of a short-term goal, while a medium to long term goal might be to save for your child’s education.
“A good plan will give you an overview of the money you have coming in and going out every month, and how much you can reasonably afford to put away for your family or your own financial goals.”
Focus on time over gifts
As a mom, there’s no doubt that you want to give your child the best in life – and this extends to material possessions, too. But it is not always possible to buy that new toy or outfit – and even if you can afford to, you shouldn’t necessarily do so, says Edwards.
Instead, she suggests focusing on the quality time you spend with your child. “When your child is grown, they probably won’t remember what you spent on them, but they will remember the love you gave them, and the special times they had with you.
“Rather put the money you would spend on nice-to-haves towards your child’s education. This will make a real difference in your child’s life, unlike a new toy that they will outgrow in a matter of months,” she suggests.
Get to grips with money 101
Like with any relationship, the effort you put in determines what you get out. Take the time to upskill yourself – there are lots of online resources, podcasts and financial courses out there that will help you understand important financial concepts and get a handle on your finances.
Edwards says that you can also unlock the power of the collective through accessing the knowledge that exists in your community. “Chat to a knowledgeable family member or friend, or contact a financial adviser, who will assist you in managing your money.”
Edwards says that ever since childhood, she has tapped into her parents’ financial knowledge by watching and learning. “My mother taught me financial discipline and to avoid unnecessary expenses, such as take-aways.
“My girl friends keep me accountable with my spend; they share grocery deals via our Whatsapp group and we’ve created an environment where we can have frank financial discussions when we plan get togethers or weekends away.
“The people you surround yourself with are so important, as they can support you by sharing knowledge and reinforcing good money habits.”
Focus on both short- and long-term saving
Determine the highest possible amount you are able to commit to saving with every payslip and put that money straight into a savings plan or account. This will help to preserve and grow it.
Edwards says that something that she wishes she had known, prior to becoming a single parent, is how important it is to save for emergencies.
“A few years ago my child received a health diagnosis that required treatments, which weren’t covered by my medical aid. I hadn’t budgeted for these specialist appointments and had no savings to fall back on, and this led to severe financial complications and stress.
“It is so important to have a savings fund that you’re able to access in times of crisis and unforeseen events, says Edwards.
“The new Metropolitan Savings Plan is a great option as it allows the plan owner to access a portion of their savings in the event of an emergency, while the funds in the long-term tax-free savings component remain secure and can grow over time with interest, for long-term investments such as your children’s education.”