Kudos to all the hardworking single moms juggling their careers and homes. You are an inspiration, you try harder to raise these mini-humans with great courage and strength! As a single parent, you do a lot to manage all of your responsibilities. Feeding children, managing a job, enduring many challenges, managing finances, etc. Best-selling author Barbara Kingsolver said, “Sometimes the force of motherhood is greater than natural laws.”
Single mothers have to adapt to managing the household budget, and financial literacy is one of the best gifts they can give their children. Saving for a rainy day is the essential part of parenthood and you can empower the next generation by teaching the value of money at an early age. Kids today are fast learners and tech-savvy, so it’s easy for you to teach them financial discipline.
Single moms can teach financial literacy: Here are some simple tips for single moms that can help them teach financial literacy to children:
Start talking to your kids about the basics of money and budgeting at a young age. Introducing piggy banks to toddlers is a great way to get started with small money moves. Encourage them to put money in two pockets, one for spending and the other for saving. The age of 7 to 10 is known to be the best age to develop saving habits. Teach them a simple habit that if they save more money, it will increase more. You can invest in long-term health and life insurance policies to secure your children’s financial future. This will ensure a good life for your children even in your absence.
Budgeting is a great skill that can help you control your expenses. Have a budgeting strategy in place and make sure you stick to it. If you’re not careful about how you spend your money, your finances could suffer. With a budget strategy, you can track your monthly cash flow and reduce unnecessary expenses. You may find it difficult to stick to tight budgets in the early years of your child’s life, but it will help in the long run. A handy tip is to set aside money for all your bill payments, groceries, school fees, and some other big expenses, and plan to invest in long-term policies for your children.
Any unexpected financial blow can put you in debt. Emergency does not only refer to any medical emergency, but it can be any diversion in your routine life. So you have to set aside a small portion of your income to deal with such unforeseen circumstances in your life. The emergency fund is like a financial buffet that will help you in your difficult days. You can have the confidence to handle any unforeseen situation without resorting to credit cards or a high interest loan.
Allocating a small percentage of your income to an emergency fund is a great idea that is only meant to come in at a time of crisis and not for regular expenses.
Avoid falling into the debt trap
If you stick to your monthly budget and save a decent portion of your income, you won’t be forced to borrow loans to meet your financial obligations. Borrowing a loan can certainly help you access funds when you need them, but the burden of debt can affect your children’s financial future. The best budget advice for single moms is to set up a small savings account in your child’s name and protect them from any potential risk.
Why should the gender gap in financial literacy concern us?
Keep funds aside for your retirement plan so that your children do not feel burdened in the future. Retirement planning provides peace of mind and makes your financial journey easier. You can start investing in a retirement plan with a small amount of money and gradually increase it. As your children become independent, you can use an additional amount in this investment and reap great benefits in the future.
It is important to educate your children about finances and teach them saving habits. Your goal should be to focus on buying what is needed and important. This will help you raise financially literate children with strong money management skills, which will help them in the future.
As a single mother, you must first discipline your finances so that your children can learn this skill from you. You can lead by example and prepare them for the future with strong financial management skills. The financial habits your children will learn from you will prepare them for any challenge or unexpected situation in life.
Ankit Gera is the co-founder of Junio. The opinions expressed are those of the author.