Being a parent is challenging enough, but when you’re doing it solo, you have double the time, financial and resource demands. You’re likely reliant on one income, but still have current expenses and concerns, as well as longer-term considerations such as life insurance and education policies.
Single moms have little margin for error when it comes to their finances, here are some practical strategies for balancing present and future financial requirements from our friends at Hero Life.
1. SAVE (trust us on this one)
You’ve heard this advice before, and we know that it’s not an easy one because things always come up, and it’s difficult to stick to the savings promises you made. We all need to find ways to save that make sense – whether it’s setting up a debit order on your bank account for a savings plan.
We all need to find ways that make it easy for us to save. For example, setting up a debit order on your regular bank account for a savings plan, taking sandwiches to work instead of buying from the canteen, scouring the supermarkets for specials on groceries, only buying kids’ clothes on sale, or even heading to factory shops for gear.
The key to changing spending behaviour is by creating a goal and starting small. Begin by switching off lights when you don’t need them to save electricity, or waiting a while before buying those shoes, or limiting yourself to one impulse buy a month. You could save hundreds of rands a month, which equates to thousands by the end of the year. This money can be saved for emergencies or put towards education policies or increased life cover.
2. CREATE A BUDGET
It’s boring and admin-heavy, but by figuring out your fixed and variable expenses, and looking at your bank statements, you’ll see exactly where your money is going, which will help you make smart decisions on what you could cut out of your life. You’ll likely find that you’re spending money on things you don’t need, or you’ll see opportunities where you could be paying less for something.
You could also try the 50-20-30 budget method: 50% of your net income should go towards your needs, 30% towards your wants, and 20% to your savings and debt repayments.
If you’d like guidance here or don’t know where to start, chat to us at Hero Life – we’ll happily guide you through the process.
3. PROTECT YOURSELF AND YOUR THINGS
Having a will, life insurance and medical aid aren’t luxuries. You might think that because you and your family are generally healthy, or that you don’t have a lot of assets, you don’t need medical aid or a will. Or you might think that because you’re fairly young, you don’t need life insurance, or that your kids will be provided for by their dad, or your parents. There are many things to consider if something happens to you – your kids’ education, first cars, weddings and general wellbeing, and you’ll be doing them a big disservice if you leave them with nothing.
These things are important, and without them, you could be left with debt, your kids could be left with no assets and lots of debt too, and you could be compromising heavily on your savings and your financial future.
If you’re unsure of where to start, or worried about how to afford it everything and how to budget, then chat to a consultant at Hero Life. At Hero Life they happily help young South African families with their finances and pointing them in the right direction.