Financial Planning for the Single Parent

Financial Planning for the Single Parent

They say that the best thing you can give your child is roots and wings, but no one can deny the value of a good education. Research from the Australian Scholarships Group shows that parents of a child born in 2006 will end up paying approximately $250k for a child’s lifetime education. A daunting figure when shared by a couple but twice as frightening for the single parent.

Before being overwhelmed by what could be the biggest expense of raising a child, take heart, a good financial plan can take an unassailable mountain and turn it into a succession of easily conquered molehills. The key is to get started as soon as possible.

Information is power

Talking to a financial planner can help you make informed long term decisions. They can help you maximize your superannuation and outline how to use an offset account attached to your home loan. They can explain more complex options like setting up a family trust, an education fund, investment bonds, different savings options or shares and put them in the context of your personal situation rather than a one-size-fits-all approach.

Remember to ask questions. Especially with education funds, like what fees will you be charged? Do the investment options meet the timing of your child’s educational needs? Do the funds cover other expenses like clothing and computers? What criteria need to be met to access the funds and what happens, say, if your child does not want to continue into tertiary education? And very importantly, what if your circumstances change and you cannot pay into the fund? Do you lose all the money you you have invested?

Tell your child about these plans and teach them the value of money

Teaching your child the value of money at an early age sets them up for a saving mentality. Encourage them to get casual work or pay them for chores. Help them set saving goals with the money they earn and show them how to track down deals and to buy during sales. Especially keep them clear of debt and show them the value of buying quality goods that last.

Make a will and look into life insurance

Albeit rather macabre to think about one’s ultimate demise, life insurance and a will can avoid further distress due to your departure. Studies show that more than 45% of Australians do not have a legally binding will. Putting one in place will ensure your estate is divided how you want it, not according to a Government formula.

Peace of mind

Once you begin to take the steps outlined above you can breathe a sigh of relief knowing that your child’s future is secure and in good hands.

DISCLAIMER

The content is for your general education and information only.  Please seek professional advice should you want to take up any of the above.  You can contact the team on 1300 Lyfegroup.

LyfePlanning Pty Ltd is a Corporate Authorised Representative (No: 1241292) of MyPlanner Professional Services Pty Ltd AFSL 425542 ABN 51 159 696 830
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