finance
 |
photo by steed media service
|
four ways for single parents to manage finances
In addition to juggling homework, extracurricular activities and doctors appointments, most single parents need to set aside time to set financial goals. A sound financial strategy eliminates the headaches and stress brought on by the inevitable, like home and auto repairs, and medical emergencies.
In order to maintain your sanity, it’s important to remain in control of your money. Follow these four steps to a sound financial future. - yvette caslin
Create a Budget – A budget is the best way to uncover unnecessary expenditures. Start by gathering all of your bank statements, fixed expenses — utility bills, mortgage and auto payments, child support income statements and pay stubs. Remember to allot line-items for variable expenses like groceries, gas, entertainment and eating out. Goal: You’ll maximize the power of your money when you know exactly how much money is coming in and how it’s spent on a monthly basis. It’s your blueprint.
Save for a Rainy Day – There’s no way to predict when a financial catastrophe will arise. In many cases the noncustodial parent is absent or unreliable. It’s imperative that you open a savings account at your bank or local credit union for emergencies. No matter how small the savings, it will work to your benefit. Goal: Save at least six months of income.
Start a College Fund – Each of your children needs their own college account. The 529 Plan is the most common investment account to save for your child’s college expenses — tuition, fees, books, room and board. Anyone, including your former spouse, can open the account and the beneficiary can be changed at any time (schwab.com). Goal: Save for your children’s education in an account that grows tax-free.
Purchase Life Insurance – There’s no doubt that you need life insurance when you have dependent children. The amount of life insurance depends on the number and ages of your children, your income level, debt level, and the value of your assets. According to the Georgia Society of CPAs, a good guideline is to buy coverage at 6 to 8 times your annual salary. In general, term life insurance, which is less expensive than permanent or cash value life insurance, is your best option. Goal: Secure your child’s financial future in the event of your untimely death.
|
Send this Article to a Friend
