Motherhood is a joyful experience but it can be tedious too. As a mother, you want to provide everything best to ensure a comfortable living for your kids. This task gets more challenging if you are a single mother and have to take care of your children single-handedly. However, a well-designed investment plan can lead you towards becoming a successful single mom.
Let’s look at five financial lessons you must keep in mind.
Adhere To Your Financial Objectives
First things first, you need to set realistic financial goals and segregate them into short-, medium- and long-term objectives. More importantly, you have to be doubly responsible in sticking to the goals. Your planning should be in alignment with these goals in order to ensure that you are saving sufficiently for your child’s education, marriage, your retirement etc. However, remember to set realistic targets as over ambitious goals could fall flat, leaving you demotivated. You might need to redefine your objectives from time to time.
Take Appropriate Risks Cover
Risk mitigation should be on priority if you are a single parent. It’s always safe to start with Fixed Deposits or other low-risk instruments and then move on to investing a part of your fund in equities after you have done your research. Make sure you have a Life and Health Insurance policy in place. This will help you take care of your family and yourself without putting additional stress on your finances. You can always seek help from a financial advisor to choose your investment instruments correctly.
Adequate Contingency Fund
You must keep an emergency fund handy to support you and your family through unforeseen circumstances such as illness or job loss etc. This fund must be worth at least eight months of your expenses to suffice for rentals, children’s education, EMIs etc. To build a contingency fund, you must inculcate the habit of saving regularly in a disciplined manner.
Maintain Financial Discipline
Discipline is important when it comes to financial success. Make sure your expenses don’t go out of hand and your debt repayment plans are in place. Outstanding Credit Card bills must be cleared off before the due date and EMIs for Car Loan, Home Loan etc. must be paid off within the scheduled date. Late EMI payment or defaulting can negatively impact your Credit Score, significantly degrading your loan borrowing capacity. Judicious use of debt instruments, regular investment and spending under control can help you achieve your financial goals in a systematic manner.
Review And Re-plan Finances
Your investment and expenditure plans might need re-visiting from time to time based on your and your family’s changing needs. Consistent reviewing of financial planning can also help you identify your mistakes and make amends where required.
Above all, do not let these responsibilities weigh you down. Besides taking care of your family, don’t forget to save for your life post retirement or purchase health cover etc.