Single parenting is tough. You’ve got to cover all the ground yourself and be there at every game, every dance, every school meet.
You’ve got to be there to get your kids through the tough days and find the time and energy to celebrate all the good times. Additionally, your financial responsibility to your children becomes yours alone.
You now need to single-handedly provide for day-to-day expenses, manage finances, save up for college, and ensure that you’re leaving enough behind for your kids.
I’d like to shed some light on a few key reasons why it’s crucial for a single parent – divorcee, widow or widower – to seek life insurance and financial planning advice.
You might not have been the financial planner in the family
With many couples, it’s one of the two that handles all the financial planning, the life insurance policies, the budgeting and all things money. If you weren’t that half of the equation, suddenly handling all of those aspects can be daunting.
You might never have considered household budgets, savings plans, or even managed fees and other payments – all things that are now left entirely up to you.
The need becomes even sharper when, as the parent who didn’t directly handle the finances, you receive a large sum of money as alimony, or as the payout from your spouse’s life insurance policy.
How do you invest that money, or budget your monthly spending to make it last? Will it get the kids through their education?
How do you set up a new policy, or amend yours to make sure the children get the most that you can leave to them?
Does your lifestyle need to change?
It is also possible that as a single parent, you have lesser available to you now than you did before. Perhaps there was no alimony or payout, or it was much smaller than you need to keep up your lifestyle.
It is worth considering, in this case, the kind of lifestyle changes you need to bring about to make it feasible to support the family with your income, savings and/or inheritance.
Without that second income, although it seems like the finances look comfortable for the time being, they might not be able to sustain that regular draining month on month.
This could involve tough financial decisions like changing schools, or saying no to certain activities and expenses that the kids would like to indulge in, or going from two holidays a year to one.
As a single parent, it’s common to overcompensate by overspending – another potential pitfall if the finances don’t really allow for that kind of a thing in the long run.
The need for Life Insurance
Your life is more valuable now than ever before. Should anything happen to you, there’s nobody else that is financially responsible for the kids, so ensuring you’ve got sufficient cover to take care of the kids’ needs is crucial.
The amount of Life Insurance you buy would depend on living and lifestyle expenses, money to cover college educations and other key expenses that you would like to take care of for your children.
You’d also have to think about the mechanics of how this sum is going to be left behind to your kids. If they’re too young to handle the money, you would need to leave the money behind in a trust, and plan access and release of funds as you see fit. Another aspect that takes some careful planning.
All of this long-term planning can be rather daunting – whether you’ve just come to be a single parent, or if you’re just starting to look into streamlining your finances.
There’s a lot of pressure here for you to be an unfailing pillar of support in every way. With the right kind of financial advice and planning in place, you’ll have covered one crucial area of support.
When you’ve provided your children with the best that they can have, it’s always a challenge to scale back when you have to. What’s harder is to think that you need to plan for a time when you’re not around to take care of them.
Both aspects need planning though, and it’s just a tad easier with an Advisor by your side.
If this is all too daunting, and you’re not ready to jump into looking for an Advisor right away, here’s a little tool you can use to get started yourself: Try this Life Insurance Calculator to get a quick estimate of how much cover you should be aiming for.