The financial concerns of a single parent – whether a single mom or single dad – can be vastly different and more immediate compared to others. In this article, Joanna Leng, Certified Financial Planner (CFP) and a member of the Financial Planning Association of Singapore (FPAS), shares how she keeps her sanity by planning for predictability and stability when it comes to money.
Being a single parent is challenging, especially when you have more than one kid and they are young.
Financial planning for me is not about getting hospitalisation insurance plans or savings policies for my children. It is not about what happens if I fall ill and do not have money to look after myself.
It is about my day-to-day living.
To keep my sanity, here are a few ways I give my life some predictability and stability when it comes to money.
1) I avoid GIROs
Surprise surprise! I avoid GIROs.
GIRO can be helpful by providing great convenience for hassle-free recurring payments for peace of mind. But having the bill in front of you when it is not on GIRO forces you to take a look at it.
It is also an opportunity to check your utility usage and share it with your children to educate them and make them more aware when they are using electricity and water. It makes them understand that it is a joint effort from everyone. We all use it, and only mom or dad is paying for it.
If the bill is higher than your past average, have them think of solutions and see if it works the following month. It is not a very accurate gauge, but it gives you some ground to work on with your kids.
Some bills like your utilities and credit card statements come in monthly with irregular amounts.
Set aside a fixed amount to keep things consistent. How does it help?
If your utility bill is about $120 a month. You set aside a fixed budget of $120. Make the same payment amount every month. When your usage is lower, you get a surplus within your account, and this adds up.
There will be times you need extra cash somewhere due to an unexpected expense. When in need, you can choose to put that $120 in or use it for an unexpected expense. Also, in months where the bill exceeds the $120 budget, there should be enough credit in your account to cover those times. The same works for other irregular bills such as credit card payments.
2) Have more than one bank account
I find having multiple bank accounts super useful when you know you need certain items every month.
You can set aside a budget for each and have them placed in different bank accounts.
This is like the earlier concept of putting the funds into your utility bill. You use only what is available from the account. Ideally, never spend more than the budget allocated.
That way, you will find a surplus at the end of the year, as saving or for spending on something you normally will not buy.
3) Set aside a fun box
There is always a way to save or invest or splurge a little is something a single parent never says. You may be eyeing an item you cannot bear to buy because you need to focus on your other expenses.
While you feel the need to pay for everything else in the world, you need to have a ‘fun box’ as a reward. I understand when another single parent tells me it is so hard to save up for something you want.
But like how everyone likes to be appreciated, you need to be appreciated too – even if it’s by yourself.
If you find saving or setting aside funds challenging, try asking yourself, if today you were to suffer a pay-cut of 20%, would you still try to make things work?
I often use this thought process not only when I want to set aside saving for something I want, I also use it when I want to think of areas I can scale down on or give up (like my online shopping). Usually, whatever comes to mind first, are the things you need the least.
Single parenting is no easy feat, from emotional to mental to physical to finances and much more.
There will be days when things will get worse than you can imagine, but there will also be days that make everything worthwhile. Look forward to those days.
The article “Turning Irregular Payment Sums To Something Regular – How I keep my sanity” – by Joanna Leng, CFP, first appeared in Financial Planning Magazine, a FPAS publication.
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