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Archive for the ‘Financial Tips: Single Parents’ Category

How Single Moms Can Stave Off Mental Illness

Depressed woman

Being a single mom can be difficult. ReadersDigest is looking out for you and has some helpful advice in this article!

A recent study based on the Canadian Community Health Survey by Dr. John Cairney, associate professor of family medicine at McMaster University, revealed that the rate of mental illness (such as depression, anxiety, bipolar disorder) for single mothers was three times higher than that for married mothers.

This group’s higher rates of mental illness aren’t necessarily the result of being single. (Single mothers are, after all, a diverse group encompassing teens, divorced or never-married women and single professionals, so experiences vary.) Rather, the increased rates are a result of specific factors, including economic hardship, caregiver stress and lack of community support. But help is often available to manage or mitigate these issues.


Top 10 Personal Finance Tips for Single Parents



Being a single parent isn’t easy, but it can be easier. provides a great article with tips to improve your financial situation.

The economy always works in cycles, and with these cycles our perceptions about money, how we should deal with it, and what our responsibilities are towards accurately informing our children about it also change.

A March 2012 survey suggests that more parents are talking with their kids regarding money. Parents are discussing with children what they need to understand about it in order to make more informed choices on money matters as they grow older.

The current generation of students, or those who are in the initial years of their careers, are deep in student debt. I believe that one can avoid student debt if parents play their finances a bit more safely and carefully craft the financial future of their kids. Parents, though, can sometimes be poor role models when it comes to managing money and teaching the same to their kids. However, even if you are a single parent with limited means, it is still possible to take stock of things and enforce good financial discipline to achieve a secure financial future for your whole family.


Free Budget Calculator for Single Parents made up a really handy budget calculator that can help you single parents out there. Give it a try!



Financial Tips for Single Parents

This article from John Hembrey of the CBC outlines some important budget tips for single parents.

5 key financial planning tips for single-parent families
Having one source of income puts additional pressure on the need to save

The financial planning goals for a single-parent family are not much different from those of a two-parent unit, but meeting them can be a challenge because of the obvious fact that there’s only one breadwinner.

For single-parent families, financial strategy is really about stretching scarce resources and prioritizing to meet both family and retirement goals, financial planners say.

According to data from Statistics Canada, lone-parent families had an average after-tax income of $45,400 in 2009 compared to $84,800 for a two-family unit.

A female single-parent, moreover, earned $43,400 during that same year compared to $55,300 for a male single-parent.

Although resources may be exceptionally tight, the solitary parent still needs to plan for post-secondary education for their child, or children, while making housing payments and planning for a retirement.

It’s a tall order, but not an impossible one, according to financial experts.

After speaking to several of those experts, CBC News compiled five key investment and financial planning tips for single-parent families.
RESP is key

Once basic bills are covered, saving for a child’s post-secondary education rather than for the parent’s retirement should be the top priority for a young family, says John De Goey, vice-president and associate portfolio manager at Burgeonvest Bick Securities Ltd. in Toronto.

The primary means of doing that is through the registered education savings plan. The government will provide a top-up grant of 20 per cent to a maximum of $500, so an RESP provides an instant return on the investment as well as the potential for growth over time through interest or increases in market value.

Parents can contribute more than the $2,500 necessary to receive that top-up from the government, but will receive no extra funds if they put more than $2,500 into an RESP.

A total of $50,000 in principal per child can be squirreled away in RESPs over time. Children will have to pay tax when they withdraw the money, but they’ll end up paying little or nothing if they are students without a regular income.
Start early

As income is particularly tight for single parents, it’s very important to let time go to work for you. Invest early to give the money in an RESP, which accumulates tax-free until the child draws on it for school, time to grow.

Starting an RESP when a child is first born allows a parent to invest in higher-risk equities to maximize their returns because over the long term markets usually go up, says De Goey.

If a parent chooses to be more conservative, saving the money in things like guaranteed investment certificates (GICs) that have a low return at the moment but one that’s guaranteed, starting early also gives the interest on the investment more time to compound.
Insurance is a must

Although it is important for all mothers and fathers to keep their estate planning in order and to maintain life and disability insurance, this is absolutely crucial when a person is a single-parent, since they are the only provider.

Parents should have a will, a power-of-attorney, and insurance that covers them in the event that they get sick or injured and cannot work.

They should also have life insurance, and a policy that covers their outstanding mortgage balance.
Your retirement

Single parents also need to plan for their own retirement, drawing on whatever money remains after RESP contributions and mortgage or insurance payments.

Some advisers recommend they utilize a tax-free savings account, which does not offer upfront tax benefits like an RRSP but allows the savings to be accessed immediately for emergencies. Money can be placed in a number of investment vehicles, including stocks and bonds, and accumulates tax free.

A good way to build an RRSP or TFSA is to set things up so that a small but manageable amount is contributed to a plan automatically. It can be hard to save up a lump sum for a big contribution, but many people can easily adapt their lifestyles to accommodate a small, regular contribution that can add up to a substantial amount over the course of a year. Most financial institutions allow you to designate a portion of your paycheque to be automatically put into a plan, or you can have an amount taken out of your account and put into a plan at specified intervals – such as once a week, or once a month.

If you get a raise, this is also the ideal time to set up an automatic contribution. Before you get used to the extra money coming in each month, channel it straight towards your longer-term plans.
Controlling spending

Budgeting is important for people of all ages, but is absolutely critical for single-parent families because there is less money to go around.

With little financial wiggle room, figuring out a workable budget and then sticking to it will help keep a family’s financial plan from going off the rails. It’s amazing how much money trickles away into impulse purchases and things like coffee and meals out, according to budgeting gurus. This is the money that you can afford to use towards your long-term goals instead of quick gratification.

“You have to be in tune with how much saving capacity you have, where you put it, how much investing you do [and] what your total priorities are,” says Adrian Mastracci from KCM Wealth Management Inc.

[end of article]


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