Nowadays, more children are raised by a single parent. I know it is hard to make ends meet especially if you are living in a developing country. But even the developed countries right now suffer an economic crisis. Even if gainfully employed at the moment, it is best that you plan ahead for you and your children’s future.
It is obvious that there is only one source of income, and all the expenses that married couples normally share together have to be paid by a single parent. With proper planning, perseverance and discipline, single parents can be financially secure and will be able to provide for the children’s needs including education.
Here are some steps you can do to make sure that your child will be able to have a stable future ahead, with or without child support from the other party.
Be conscious of your financial standing. Let us say you are gainfully employed, which I hope you are. Take some time to list down all your sources of income and all of what you spend regularly. Take into account also all your non-monthly expenses such as the child’s tuition (annual tuition fee is suggested to be broken down into monthly fees, for accounting purposes) and Christmas gifts as well. Reflect on this exercise: is your income enough to cover all your expenditures?
List also all your assets (car, time deposits and other investments). And then list all your liabilities too---credit card debt, scheduled car payments, tuition still to be paid, etc. Assess if all your assets are enough to cover all your liabilities. In case something bad happens to you in the future, your debts will be paid by these assets. If the assets are not enough, then at least now we know that you need to save more or build your asset base more.
Start to save now for the future. Start saving now for an emergency fund first before saving for your child’s college tuition. This emergency fund will represent around six months of your earnings, which will help you in case you lose your job or you get sick and have to stop working.
This emergency fund is very crucial so you have to save for this first and foremost. You never can tell when you may really require it. It may be anytime between now and before your child reaches college. And if that happens, we hope it won’t happen, without an emergency fund, your living expenses will suffer and will not be funded until then.
If you find it hard to start to save, this tip might help. Just set aside at least ten percent of your salary before you spend the rest of your pay. Set it aside in a special account for your emergency fund. You may be able to transfer this emergency fund if the amount is enough to be invested in a high-yield deal so that your savings will earn more interest.
Obtain insurance. Getting life and health insurances is very important so that your family will not be severely affected if something happens to you. You should not think of it as another expense in your budget. Remember that this also protect your family’s financial future. Get insurance products that will fit your needs and your budget as well.
Purchase only on what you really need. Minimize your expenses. Pay only for your needs, rather than your wants. In going to the supermarket, buy only what is on your list. Impulse buying is no-no. Find out what you can do without buying it.
Shop wisely. Always compare prices of the goods when going to the store, and buy the lowest priced item with the quality you want. Take advantage of the generic brands or in-store brands---you will find out they are of good quality too, and a lot more economical than those items with brands.
Buy in big volumes so that you may take advantage of discounts and to save on transportation and time. Always stick to your budget when shopping. Go to places where inexpensive items are sold, or you can look at secondhand shops and auction websites for secondhand items like furniture, books, etc.
Live simply. Always teach your child to live simply and impose that it is not important always to have the latest bag or pencil case or dress in fashion. Tell her always it is who you are deep inside; it is not what you have or what you wear that is important. Frugality is important, so educate your child to save a portion of her allowance regularly.
Set aside money for your child’s educational expenses. A college savings plan through a reliable financial services company or a bank is a good option for your savings, or you may save a fixed amount regularly and invest the money wisely on your own. If you get a pre-need plan, a premium should be paid every month for a number of years. This is okay for those who need a little more help in saving. If you choose the second option, you should discipline yourself in setting aside a certain amount every month, apart from your emergency fund. If you have enough money for the required minimum investment, you may move the money to stocks or bonds so that it may earn more.
Live and conform to your lifestyle. Most parents want the best schools for their children, but it can get to be a big burden in the long run financially. Remember that it is not the school, but the person himself that will determine success in the work area. If you know that your resources will not be able to put your child in the best university, better put your child in another school that equally offers quality education at a lower price.
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