Being a parent is no easy task. Being a single parent is even more challenging, especially when it comes to financial obligations.
Alfred Ramosedi, African Bank Group Executive: Sales and Marketing, says that with good budgeting and discipline, single parents can come out financially stable at the end of the month. He touches on various issues which single parents should be aware of:
- Don’t overcompensate – single parents often have feelings of guilt associated with the perceived loss in their child’s life. They overcompensate by buying expensive gifts and generally spending more than they should. The reality is that one of the best gifts you can give your children is an appreciation of money.
- Create realistic budgets and educate your kids – talk to your kids about the household budget and help them understand what money is available for necessities and wants. Single mom, Jacqui Rorke, says, “My girls understand why they can’t have what their friends have because we are saving towards something special that they really want – like a weekend at the sea, for example.”
- Pay for the necessities first – make sure necessities are clearly labelled in your budget. This should include things such as bond repayments or rent, food, school fees, school uniforms and so on.
- Start with whatever you can afford in terms of savings or paying off debt – don’t keep putting it off as debt will accumulate and interest rates increase. The same applies to savings; even a small amount invested in the correct savings product could yield good returns in a few years.
- Look for ways to make additional money where possible – there are numerous ways to earn extra cash if you are savvy and dedicated. Think about what skills you have to offer and how you could possibly use these to earn extra cash.
- Consider applying for a fees exemption from Government – there is a possibility of getting a full or partial fees exemption off annual school fees. Take the time to find out how the process works and it may pay off.
- Downgrade if you need to – have a look at the type of car you drive, where you live and where you shop. Decide whether it makes sense to adjust your lifestyle in order to have more disposable income at the end of the month. It may also be a good opportunity to sell what you may not need and use the additional cash to invest or save.
- Don’t take on unnecessary debt – remember that you pay interest on personal loans and retail accounts. In the end, you are paying far more than if you had bought the item with cash. Question whether it is a necessity or a want.
“Know what you can afford, stick to the plan, and decide what should be financial priorities. Remember there is nothing you can’t recover from. In five years you can work yourself out of a bad financial position with a good plan and the right expertise. Don’t be afraid to speak to a financial consultant if you need help with budgeting. Just because you are a single parent doesn’t mean you have to do it all alone,” concludes Ramosedi.