A woman, who dawns the avatar of a mother, feels quite overwhelmed and lead a life full of multiple responsibilities as a single parent. She works hard to fulfil those responsibilities every day, for the happiness of her child. Being a single mother, the key concern that would run through one’s mind would be money management, legal proceedings and also personal matters. However, the decision to secure her child’s future and finances inevitably take top priority, for which women should start planning beforehand. The investment decisions a mother can make today will determine whether or not her child will be able to lead the life one can wish for them. A single parent would like to provide their children with the best education, experiences and opportunities available in today’s world. To avail these prospects of life, one should first need to identify the source for the flow of funds that will add life to their child’s ambition. There are many ways for single mothers to safeguard their child’s financial future. As the saying goes, ‘well begun is half done’, to allure this one can make a quick and easy start by setting up a bank account by their child’s name. There are several banks that provide the option to open up an account for children even at a very early age. Once the account is open, one can start depositing a feasible sum of money, which will more or less serve as a large piggy bank for their child. In addition to these savings, one can also consider investment products like Equity mutual funds or a debt product like Public Provident Fund (PPF) or Debt mutual fund etc.
In respect of savings, even a small amount of investment can enable mothers to accumulate a large corpus of money for their child’s better future. To attain long-term goals, it is important that one should consider investing in mutual funds, with the help of a Systematic Investment Plan (SIP), i.e. similar to a recurring deposit etc. Nowadays, this is a smart option as the rate of interest received on investment depends on the performance of equity markets, which can ultimately help to secure better returns over time.
It is crucial for single mothers, to be adequately insured with proper term insurance such as Life Insurance etc. One should also have an adequate health cover like Health Insurance plan to cover medical expenses. While the children are still young, it is important for a parent as a single mother to inculcate themselves, the habit of ‘saving’, so that their children can also understand the true ‘value of money’ before they even begin to spend. Children should be given requisite knowledge about financial planning so that they can take an active interest in acquiring savings from the very beginning.
Irrespective, all responsibilities and financial benefits for their children, a parent must not forget to provision and maintain adequate emergency funds. These funds will ultimately serve as a protection aid when a parent or a child may actually need money in case of unforeseen situations and emergencies.
Being an independent and sole bread earner it is critical for a single parent to follow the above-recommended options to secure their family’s interest for a better future. With the above-highlighted investment options, a single parent will not only be able to create a dedicated pool of money to meet their child’s requirements but also accumulated a reasonable sum of funds to fall back on in times of need. Throughout the cycle of motherhood, one should remember to take calculated decisions to be ready and financially secured at
*This article is contributed by Priti Rathi Gupta, Founder, LXME and Managing Director, Anand Rathi Shares & Stock Brokers Ltd.)
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