You have goals. We'll help you get there. Jump right in. We're ready for you!

Money matters for single moms

RyanJ Blogger

24607_BPCMNAASP0617_security_money_divorce_comm_643px.jpg

 

If you’re a parent, you deserve an earnest “thank you.” If you’re a single mom, you deserve a big hug. And a four-hour massage. And maybe an all-expenses paid retreat to a quiet tropical island.

 

Yes, parenting is challenging. Single parenting can feel downright overwhelming at times.

 

In a post on reducing single-parent stress, Parents.com suggests that getting a handle on finances should be a top priority. “Raising a family on one income, or relying on an ex-spouse for child support, can be one of the hardest aspects of parenting alone,” the piece notes. So gaining a better understanding of your financial picture is important – for you and your kids. 

 

Use a divorce checklist

Knowing where to begin is the first step. If you’re divorced (or currently going through the process), tackling financial matters may seem daunting. 

 

“A divorce is kind of like hitting the reset button on your finances,” says Ryan Bertrand, vice president and managing director of Advanced Markets at Transamerica.

 

To offer some guidance, the Advanced Markets team compiled the Divorce Checklist: 7 Steps to Consider. You’ll, of course, want to consult with a financial professional and seek licensed tax and legal counsel when necessary.

 

As you start down the path toward financial stability, here are just a few things you might want to think about:

 

Create an emergency fund

Most financial professionals suggest keeping four to six months of living expenses in a liquid account for unexpected events. As a single parent, you’ll want to have enough to cover your kids’ expenses too. That amount may seem like a lot but start with small, regular deposits into a liquid account. Maintaining an emergency fund may help you avoid dipping into retirement savings or maxing out credit cards in the case of an unforeseen event.

 

Get a handle on credit

If you have issues with credit and don’t feel like you’ve got the ability to address it on your own, consider seeking guidance from an organization like the National Foundation for Credit Counseling. In some instances, they might be able to provide free or low-cost counseling. 

 

Rein in childcare costs

Childcare costs are soaring across the country. Recognizing the financial burden this imposes, Bertrand suggests it’s worth reaching out to grandparents, other relatives, or friends to potentially reduce costs and fill in the gaps.

 

A smart way to save for higher ed

When it comes to putting money away for your children’s education, consider looking at a 529 college savings plan or possibly a Roth IRA. NerdWallet.com compared the two options: “Your contributions to a Roth are available to you anytime tax- and penalty-free.” So, in that respect, it can act as a back-up emergency fund if the need arises. Keep in mind that generally, only your contributions can be pulled without penalty before you turn 59½. Distributions on growth must be used for qualified educational expenses to avoid the 10% penalty. NerdWallet also notes 529 plans have some advantages when it comes to contribution and income limits and taxation. These vary by state, so do some comparison research.

 

Time is valuable – so treat it as a commodity

Of course, there are a lot of things to manage as a single mom – both financially and personally. In terms of budgeting, Bertrand includes time on the list. That means budgeting time for yourself and time with your kids. You might find having those moments can offer some perspective and remind you what’s most important. If that fails, there’s always that massage.

 

If you’re a single mom, do you have any tips for managing the day-to-day challenges of motherhood? What works for you regarding money matters?

 

24607_CBPP0617

Recommended Articles

Warning: Misuse of Transamerica name in fraud schemes. Read more.

This material was prepared for general distribution.  It is being provided for informational purposes only and should not be viewed as an investment recommendation.  If you need advice regarding your particular investment needs, contact a financial professional.

Insurance products and services are offered or issued by Transamerica Life Insurance Company, Cedar Rapids, IA; Transamerica Financial Life Insurance Company, Harrison, NY (licensed in New York); Transamerica Advisors Life Insurance Company, Little Rock, AR; Transamerica Premier Life Insurance Company, Cedar Rapids, IA; and Transamerica Casualty Insurance Company, Columbus, OH. Variable products and mutual funds are underwritten and distributed by Transamerica Capital, Inc., or Transamerica Investors Securities Corporation, each a broker/dealer and member of FINRA. Securities and investment advisory services offered by Transamerica Financial Advisors, Inc., a broker/dealer, member of FINRA, SIPC and a Registered Investment Adviser. Investment advisory services focused on the unique needs of individual retirees, retirement plans and their participants offered by Transamerica Retirement Advisors, LLC, a Registered Investment Adviser. References to Transamerica on this site apply to an individual company or collectively to these and other Transamerica companies. This site may not yet be approved by the Departments of Insurance in all states at the time of publication. Transamerica companies are part of the Aegon Group. Copyright 2011 - 2017 Transamerica Corporation, 4333 Edgewood Road NE, Cedar Rapids, IA 52499 - All Rights Reserved. Transamerica does not sponsor, endorse or promote any products or services mentioned

  • COMB0417