How Single Moms Can Save More Money and Start Investing

How Single Moms Can Save More Money and Start Investing

Single mums divide their time between childcare and work. Most of them may make it look easy, but single mums face many challenges. Hence, increasing their savings and wealth may be the last thing in their minds when it's already difficult to provide for their children.

However, we should also stop romanticising the struggle of single mothers. More importantly, we should break the stigma toward them. If you're a single mum who barely has time for yourself, you definitely need more empowerment than criticism. You wish your peers, family, friends, and relatives encouraged you to thrive financially, even if it means you can't be a stay-at-home parent society wants you to be.

The problem is a single mum's typical schedule is so packed that finding time for building savings and wealth can be another challenge. But you don't have to feel trapped in this reality. You can take these measures to be in control of your time, life, and finances:

1. Prioritise Personal and Childcare Expenses

Understandably, mums prefer to spend money on their children rather than themselves. It doesn't help that society also expects mothers to sacrifice their well-being for their children. But if you don't invest in yourself, you may pay a higher price later, when your health takes the toll of your sacrifices.

You don't need to budget for mani-pedis, facials, and shopping. You can take care of those when your child becomes independent. Instead, budget for health insurance, a weekly or monthly babysitter, or your favourite food. These expenses are occasionally useful, and health insurance, in particular, provides financial security. In addition, budgeting for them may help you determine a workable monthly budget that equally benefits you and your child.

2. Entertain Your Child for Free

It may be easier to entertain a child with a tablet, but they may get bored with it fast. As a result, they would ask for another thing to play with, most likely another gadget because they've learned to see them as toys. Try to make your child unlearn this habit. It will help them avoid relying on material things for entertainment and happiness.

You can find entertainment that costs little to none. For example, take them to the park for their birthday instead of taking them out shopping. If they love art, buy them inexpensive colouring and drawing materials. Baking something together is also fun and budget-friendly. Low-cost and free entertainment may even help you connect with your kid better because a screen does not hinder you.

3. Consider Buying a Home

If you are renting, buying a home may help you save more money, especially if you're renting in an expensive neighbourhood. Saving for a mortgage down payment may be more manageable than saving for monthly rent. Plus, if you own a home, you can build equity from it. You may use that equity for home improvements or earn an extra profit when you resell the home.

In addition, fixed-rate mortgages stay the same throughout the life of the loan. On the other hand, rent may change depending on the property's value and the market. If more developments appear in your area, your landlord may charge higher rent while you continue putting up with a small space and limited amenities. So, when you finally save enough money, consider investing in a home.

4. Buy Short-term Investments

Trustworthy short-term investments don't require high outlays. They allow you to build wealth for as little as PHP10,000 (less than $200). They also come with fewer risks, unlike long-term investments that can decline in value if the economy crashes.

Of course, long-term investments are also beneficial. But if you're only starting-with a child who depends on you, no less-you can stick to short-term investments first. However, a short-term investment can also take a few years to mature. No money grows instantly, so be patient and manage your expectations.

You can use your investment returns to pay for your child's first tuition fee. Then, when you make more money, you can invest again and save it for your child's high school or college education. Your money would've already grown significantly by that time, leaving out a considerable amount for your retirement savings.

5. Increase Your Income

Limiting expenditures isn't the only way to increase your savings and become wealthy. Don't feel like you always need to sacrifice to get to the top. You are already sacrificing enough for your child. So, instead of depriving yourself of comfort and luxury, increase your income to afford them all. You deserve to enjoy your money for being an amazing mother and career woman.

Taking these steps to bigger savings and wealth can restore the control you might've lost when you gave birth. But don't make any impulsive decisions. Building wealth requires calculation and a healthy level of risk aversion.

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