Financial planning for Single parents

Prithvi07 2018-07-11 22:11:19

 

Single parents have too much on their plate. Apart from taking care of kids, they also shoulder the financial burden alone. A financial plan is extremely important in creating a stable financial future for client€™s family by balancing cash flows with expenditure and their investments.

A few factors need to be considered by single parents:

Low to medium risk

Being the sole provider, without an additional support system to fall back on, makes them cautious about investing. Single parents should start an emergency fund. This will act as a safety net in case of unforeseen events.

Single parents are minimalistic and prefer to concentrate on the basics. Their core focus is on saving for emergencies. Therefore, they should prefer concentrating on saving for key financial goals like retirement and children€™s education.

Child care and education

Unlike couples, single parents struggle to balance both the emotional and financial needs of their kids. Planning a child support system is as important as planning the child€™s education. Sensitizing children on the importance of money handling is also a major concern of single parents.

Retirement vs child education

Both retirement planning and a child€™s education are crucial. However, when there is conflict about which goal to prioritize, single parents generally choose children€™s education over retirement planning, but retirement needs must be a priority. Children can always get an education loan, whereas no bank will give a loan for retirement needs.

Estate planning

It is important for single parents to plan for contingencies. They should take measures even for exigencies such as unforeseen death. Considering this, clients must draw up a will, which specifies who would take care of the children and how the assets will pass down to them in the parent€™s absence.

Long-term financial planning for single parents is challenging. Losing a job or falling ill can be more catastrophic as a single parent than if one is part of a two-income couple. Only a proper financial plan can help mitigate the financial worries of single parents.

Insurance

The parent should also keep in mind on how to tackle any unforeseen and sudden occurrences which shall act as a cover to protect the child€™s future. Hence, the parent is recommended to have a pure life cover (TERM INSURANCE) policy on their name and a medical insurance policy for the family to live harmoniously.

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Wert Advisory services is a wealth management and financial advisory company based out of Hyderabad, we provide following range of services; Financial & retirement planning, Wealth management solutions, to help our clients in fulfilling their financial dreams.

Feel free to write to us on Prithvi.potta@wert.co.in or contact us at:

WERT Advisory Services,

B-3,Vaishnavi,Plot No.645,Raod No.36, Jubilee Hills,

Hyderabad- 500 033

Landline: 040 2354 1828

Hand phone: 98853 30546