5 financial planning tips for a single parent

You can do this by planning your finances using these tips.

Create a yearly spending budget

It is important for you to keep track of all your expenses. Use apps like Wally, Walnut and Money View to monitor and control your spending. These apps can also link to your bank accounts and remind you to pay bills and EMIs, if any. Having a yearly spending budget that you can easily track will allow you to save more.

Invest in a variety of investments to spread your risk

Saving cash in a savings account is not enough. It is important to put your funds to constructive use so that you can grow your wealth based on potential needs like the future. Create a diverse investment portfolio by investing in a range of schemes like a Fixed Deposit, PPF, mutual funds, recurring deposits and equity according to your risk appetite. You can create a tailor-made plan, based on requirements like your child’s college fees or buying a home.

Get a good insurance plan

Insurance protects you and your family during unfortunate events. So, ensure you have basic insurance policies like health insurance, life insurance, car insurance, etc. These policies require you to pay a yearly premium and in exchange you receive complete cover during times of need.

Create a will

It is important for you to create a will so you can ensure that all your wealth and assets are passed down to your children or family members to secure their future. Hire a lawyer to create a will and ensure that you also nominate beneficiaries for your various bank accounts and investments.

Build a cash reserve for emergencies

The loss of a job, an accident or a natural disaster may lead to urgent expenses that you may not be able to fulfil through your salary alone. So, create an emergency fund by channelling some amount of your pay check into a separate account. This money will also come to your aid in instances where your insurance is insufficient or not applicable.

Implementing these tips can help you live a financially secure life and ensure that you have finances to use on a rainy day. It can also help you save so that you can finance your retirement and still provide your child with a good education and lifestyle.

DISCLAIMER: The mentioned fixed deposit interest rates are indicative only, and may be subject to change periodically. Please check the interest rates on our website.