Handling finances as a single parent can be a challenge. It’s easy to feel overwhelmed when you’re on your own.
Here are seven financial tips to help you get a handle on your money and help you build financial security.
Create a cash flow map
Cash Flow Mapping is an essential tool to help you stay on top of paying your expenses and debt and saving for your goals. All roads lead to cash flow. That’s why telling your money where to go instead of asking it where it went, is so important By doing so, you increase awareness, you increase communication amongst family members and most importantly, you increase confidence allowing you to focus on your mission. Our software will create a personalize cash flow map. If you have some money left over you could put that in savings or use it for something else. If the balance is in the red, we’ll see if we can find some inefficiencies in your spending.
Happiness is a positive cash flow!
Eliminate or Limit your credit card debt
As a single parent, it’s a good idea to break the habit of relying on credit cards. Interest rates and fees can add significant debt to your finances, especially if you get behind on payments. The best way to eliminate debt, create an emergency fund, and save for retirement is with Your Family Bank. This program gives your money 2 jobs, pay off debt and save with the same dollar. It comes with guaranteed growth, access to your money at all times for any reason, tax-free growth and withdrawals, no volatilty – your money is not at risk in the stock market, and more.
If you must use a credit card, make sure you get a card with the best possible interest rate. Visit Bankrate.com to compare card rates, fees, and terms.
Set up a safety net
It’s smart to create a financial safety net that includes twelve months of expenses to help see you through a crisis. Unexpected events can have a huge impact on your financial future if you aren’t prepared.
Create an estate plan
To make sure your wishes are carried out after you’re gone, you need to create an estate plan. First, you’ll need a will that specifies who will take care of your children if you die and how your assets will be passed down. If you already have a will make sure it’s updated. If you don’t have a will, you should create one with help from an attorney who can ensure you have the right guardians for your children designated, beneficiaries chosen and you’ve picked an executor you trust, who will oversee the implementation of the will.
Along with a will, you should also draft a power of attorney document, which gives someone the legal right to make decisions on your behalf if you are unable to do so.
Consider life insurance
Buying life insurance is a smart way to help protect your family, especially if you’re a single parent. If it’s your first time shopping for life insurance, you should figure out how much life insurance you need for your family. Be sure to factor in the cost of caring for dependents, such as your children, as well as their cost of living after you’ve gone. Total your monthly bills and fixed expenses, and make a list of what you provide for your family. This should include necessities like food and medical costs, but also money for vacations and other quality of life needs. There are several kinds of life insurance to consider, from term, to guaranteed, to indexed universal life.
Think about getting disability insurance
As a single parent, you don’t have a partner’s second income to shoulder expenses if you’re suddenly unable to work. Check with your employer to see if they offer disability insurance. If they do, you could receive a reduced income when you put in a claim. If your company doesn’t offer disability benefits, a life insurance agent can help you set up the insurance.
Know what tax benefits you qualify for
Single parents are eligible for specific tax benefits, exemptions, and credits, so be sure to do your research on what you might qualify for. Visit the IRS website to learn more about different tax credits you may apply for based on your situation.
Contact The Money Architects
You don’t have to figure out your finances all by yourself. If you need guidance, consider working with The Money Architects, we can help you determine your life insurance needs, and assist with planning, savings, retirement, and paying down your debts. Get your FREE financial blueprint (which includes Cash Flow Mapping and Your Family Bank) today!