How To Create A Stable Financial Environment For Your Kids
Being a single mom is hard, I’m sure you know this as well as I do. One of the hardest things about being a solo parent is keeping yourself afloat financially. It’s difficult to make it on one income, and sometimes we have to make sacrifices to keep the lights on. But being stable financially is an important lesson to teach our kids, so here are some tips on how to create that financial stability for them.
How To Create A Stable Financial Environment For Your Kids
As any parent will know, stability is absolutely essential for your little ones’ overall health, happiness, and wellbeing. This can apply to all sorts of areas of their lives. We like to get them into a routine of waking up at a certain time, eating at certain times, and going to bed at certain times. We like them to be surrounded by a consistent support network of relatives, friends, and other loved ones. We try to raise them in the same home without moving for as long as possible. Why?
Well, studies conducted in areas ranging from psychology to sociology, economics, public policy, demography, and family studies have all found that children thrive in environments that they find familiar, and when they know what to expect of life. Now, there are, of course, certain situations in life that cannot be foreseen that create disruption in our kids’ lives. Change in individual or family health or circumstance can be abrupt and unexpected and these need to be dealt with as and when they occur. However, there are areas of our lives that we can actively foster a stable environment for our children. Finances are one of them, so let’s focus on this area for now. Here’s everything that you can do to provide your little ones with as stable a financial environment to live in as possible!
The first step that you can take towards fostering a stable financial environment for your family is to budget. It may sound relatively surprising, but the majority of people tend to live their lives without budgeting right up until the point that they become responsible for someone else. They will see their wages deposited into their bank, the essentials will be deducted automatically through direct debits, and they spend whatever is left on whatever they fancy.
However, things simply cannot work this way when you have children. When you have children, you need to sit down and sort your finances out .Work out your overall income after tax and other legally enforced costs have been deducted. Next, arrange for the costs of essentials to be paid from your account the day after your funds have been deposited (this allows time to ensure that the funds are definitely available). Then figure that you are left with will be your disposable income, but you shouldn’t necessarily spend this all at once.
You should dedicate a percentage of this to transfer into a savings account. This money will mount up over time, and can then be used as an emergency fund should you be hit by unexpected costs at some point down the line. By having a budget, not only can you be sure that everything that needs to be paid can be paid, but you can also account for unforeseen problems ranging from the replacement of broken appliances to tiding things over during periods of unemployment.
Understand How to Use Financial Products Effectively
The majority of parents use financial products for various reasons. Some use them to access last-minute cash when necessary. However, the most responsible way to use them is to boost your credit score, so that you can take out larger credit agreements as necessary, or secure a mortgage if you intend to purchase a property. It is extremely important that you understand how to use financial products effectively, as improper use of them can see you quickly fall into irrecoverable debt that could put yours and your children’s comfortable lifestyle at risk.
When taking out financial products such as credit cards or loans, you need to find the absolute best options on the market. Different lenders will offer different interest rates, terms, and conditions. You need to secure the lowest interest rates possible and seek out favorable terms and conditions. You then need to use these products responsibly, making payments back on time and never exceeding your agreed credit limits.
Take Out a Life Insurance Policy
Though this isn’t the cheeriest subject and the majority of us will avoid thinking about it at all costs, you never know when disaster may strike and your children may be left without a parent. Hopefully, this isn’t something that you will ever have to worry about. But it’s extremely important that you prepare for it regardless, especially being a single parent, this is a big issue.
By taking out a life insurance policy, you will ensure that funeral costs are covered (meaning that your kids won’t be lumbered with debt to repay in the long run) and that they have a comfortable sum to tide them over until they are able to fend for themselves financially. While you are taking out your life insurance policy, you might also want to consider writing a will. This will ensure that any of your assets are left to your little ones too.
Taking Out Home Insurance
Again, it may sound a little pessimistic, but you should always prepare for the worst. There are various situations that could result in damage to your home or its contents, so you need to be able to replace and repair anything that requires replacement or repair. Home insurance can cover this. While policies tend to sound relatively pricey when you look at their monthly sums being deducted from your bank account, you need to bear in mind that by paying this amount, you are protecting almost every material belonging that you own. The price is more than worth the protection that it provides you with.
Most single parents do not own their homes, but if you are one of the lucky ones, blessed with owning a home of your own, then protect it by taking out insurance. You will be glad to have it if disaster ever strikes. There is also renters insurance as a possible option for you mamas who rent.
As you can see, there’s a whole to bear in mind when it comes to providing your kids with a financially stable home to grow up in. But it is achievable. Just take the above steps to get started as soon as possible! It may be hard at times, trying to make ends meet on your own. But you can find stability with a little extra motivation to set up your finances properly.
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Much love, JessXO