Shouldering multiple responsibilities single-handedly is one of the most difficult part of being a single mother. In the long list of responsibilities, the most significant one is to manage the finance.
It is imperative to remember that there is no harm in seeking help and guidance from finance experts. It is important that you prudently divide the earning into three parts-Expenses, Investments and Savings.
1. TAX BENEFITS-
Change in tax rules applicable to a single mother is important to monitor when you manage finance. Saving money is as important as earning it. Make use of the tax benefits provided to you. These benefits vary from state to state. Maximise your tax deductions and rebates. Make sure to do a thorough research before you file your tax.
2. BUDGET-
Spending all your money is not a good idea. Analyse your situation. Chart out a monthly budget of your household. Deduct the amount for your family’s consumption and for your personal needs from your gross income. It is about being aware of every penny you spend and yet not being a miser. Living your life is important, But don’t spend too much money on things that do not have a lot of utility.
3. FINANCING THINGS TO BUY-
Financing things in current times is not as big a taboo as it was earlier. With proper planning, low interest rates and payment plans a lot of material can be afforded. The vital point is to make sure that you don’t fall into a debt trap.
4. EMERGENCY FUND-
As a basic rule make sure you have around 4-6 month’s salary saved as an emergency fund which is easily accessible during emergencies.
5. LIFE INSURANCE-
Life Insurance will act as a permanent safety net and some of these plans also cover accidents, disabilities and terminal illnesses. Before locking down on your policy make sure that the insurance policy covers all stages of terminal illnesses right form the diagnosis.
6. HEALTH INSURANCE-
Health insurance for you and your dependents is very necessary, especially in today’s time when young children are highly susceptible to catching the pandemic. There are 2 types of health insurance, one that reimburses in case of hospitalisation and another that provides a lump sum pay out during a critical illness like cancer or heart disease. Be smart with your financial planning.
