And, of course, the onus is now on you alone to be their provider. Here is a primer how to get started with this new way of life.
There are different kinds of single parents. They include:
Single parents by choice: Nowadays, there are some people who do not wish to get married at any point of time, but do want to have a family. They generally come from educated and financially successful backgrounds. For instance, model and actor, Sushmita Sen and Raveena Tandon had adopted children while still being single.
Part-time single parents: These are parents whose spouses are away from home for long periods of time, such as armed forces personnel, merchant navy sailors and people with a lot of work-related travelling. Though the absence of the spouse is painful, they have the slight advantage that their spouses are earning an income and supporting the family financially.
Widow(er) with young children: An untimely death of the spouse can be very difficult emotionally, along with the financial responsibility of young children. Some relief can come if there is adequate life insurance of the deceased spouse and an additional income stream.
Divorcees with child custody: This is one of the most difficult situations for a single parent to be in. Breaking off from your spouse could be traumatic. If you have child custody, getting a hold of yourself to take proper care of your children becomes very important. Of course, the financial situation can be a lot better, if you get alimony and child support from your estranged spouse. For starters, you need to build a defence mechanism which should include people who are your friends and family and will help you to handle the crisis.
Mood and money
The challenges are two-pronged. First, you need to have enough to incur your monthly expenses. Moreover, you will need to save enough for rainy days as well as the future. Here are a few pointers to help you do just that:
Invest in yourself: It is never too late to upgrade your skill set. If you do not possess adequate qualifications to help you earn as much as you need, you may have to join a part-time or distance learning course to boost your career and income.
Flexi-schedules: If you find that your children need more of you time and attention, you should think of getting a job or work that matches with your children's school timings.
Reorganise finances: Make a list of all your assets and liabilities. Know what your net worth is and how liquid it is. Try to get out of high interest debt, like credit cards and personal loans. Try to match timing of alimony or pension receipts with major monthly payments and loan instalments.
Get insured: As a single parent, you should have adequate life, critical illness and disability insurance, so that your children do not have to suffer financially, in case of your illness or untimely demise. Get adequate medical insurance for yourself and your children.
Make a will: You need to have a valid will in place specifying who will be the guardian of your children, in case of your untimely demise and how your assets will be transferred to their benefit and administered, if your children are still minor.
Simplify: Budget your monthly expenses and try to cut down on non-essential items. Remember, when you are a single parent, your income can drop substantially, but living expenses drop marginally. Invest in good help, which allows your children to be taken care of, while allowing you to earn better.
Make a plan: Create milestones when you will need large amounts of money for children's education, marriage, your retirement etc. Start saving towards these milestones. It can be very difficult for a single parent to run the household and save at the same time. However, it is imperative that you start saving for the future as soon as possible. Consult an expert financial planner or advisor, if needed.
Being a single parent, especially if not out of choice, can be an overwhelming task. However, maintaining a positive attitude and some astute planning can make life much easier for you and your family.
The writer is a financial planner and director of Touchstone Wealth Planners.
