By Tomika Anderson
Single moms: they practically wrote the book on making “a dollar out of fifteen cents.”
Often responsible for everything from putting meals on the table to socking away money for their kids’ college funds (if they can), single moms—particularly custodial moms, who make up 83 percent of the solo moms in this country—often do it alone with little to nothing left over.
Add to this that they’re statistically likely to make only 79 cents on the dollar as compared to their male counterparts (and only 64 or 56 cents if they’re Black or Hispanic) and things like, say, developing a healthy retirement portfolio seems almost impossible.
But it doesn’t have to be this way, says professional single mom expert Tomika Anderson, a graduate of The Coach Training Academy and founder of Motivated Mamas, a virtual coaching and service for professional single moms. When you consider that a growing number of single moms are older, college-educated and in a higher income bracket, Anderson says despite the many obstacles they’re still in a position to not just survive but thrive with hard work, careful planning, and discipline.
“I’m one of the moms who started later in life,” says the University of Virginia grad, “so I get how daunting it is to have and save and provide for our kids on one income,” she says. “It’s a dilemma I discuss all the time with my clients.”
- Get a financial education. Why fly by the seat of your pants when you can get your financial education for free? asks Anderson. Whether you take a class offered at your local church or library, enroll in one online or listen faithfully to podcasts like the one Dave Ramsey offers, single moms can do everything from learning to maintain a workable budget to paying off debt in just minutes a day.
- Accept the child support, if you can get it. “There are lots of reasons single moms don’t accept or pursue child support,” Anderson says, “everything from shame or pride to fear of drama with the ex, or a belief that it’s too little money to fight over in court. But the average of $330 per month that custodial single parents receive adds up,” she says. “$330 x 12 months x 18 years is $71,280,” she says. “If you don’t need that money to make ends meet, investing it in a financial vehicle like a 529 college savings fund will be putting it to excellent use. So if you invested that $330 a month in a 529 at a rate of let’s say 8 percent rate when your child is born, that will net you close to $85,000 when it’s time for him to go away to school—enough for him and his sister to get through all four years.
- Follow the money—online. Forget the old-school paper and pen budget: track exactly where your money goes from month to month through apps like Mint.com (a free, online tool that allows you to combine your banking, credit card, brokerage and investment accounts to get a complete picture of your money all at once). Automation of bills not only bodes well for your credit score by eliminating potential late payments, says Anderson, it allows you to see where you may be overspending in one area—and where you can better save/invest in another. Plus after you’ve set it all up, it gives you hours of your life back—a major win for single parents.
- Eliminate credit card debt. “Quite simply, eliminating credit card debt increases your financial stability,” says the mom of one. Instead of throwing money at problems you free yourself to throw it towards long-term solutions like a robust, emergency-savings account to protect you and your children in a financial crisis. It also:
- reduces the number of bills you’ve got to pay,
- puts you in control of your assets,
- increases your future earnings and
- teaches your children good money habits.
Win, win, win, win. Moms can learn how to do it, dummy-proof, here.
5. Invest in life insurance. A good cash-value, life-insurance policy doesn’t just protect your kids in case something happens to you—it’s an affordable vehicle for building multigenerational wealth over time. Still, says Anderson, a recent survey revealed that nearly 70% of single-parent households don’t carry life insurance, compared to 45% of married-parent families. Purchased in your 20s or 30s with a good bill-of-health and maintained over time you could be a millionaire by the time you retire, at no more than $50 - $100 a month depending on the face amount of your policy, she says. That money, with continual investment, could go toward anything from paying for college tuition to helping create a retirement nest-egg.
Be Persistent! Single moms can Kick Ass Financially!
An award-winning content creator and communications strategy consultant, Tomika has contributed to such U.S. and international outlets as Entertainment Weekly, The Associated Press, Time Out New York, Essence, The Root.com, National Journal, Ebony, Black Enterprise, People, New York, MTV, BET, The CW Network, Fuse, FOX News and CNN.com, and worked with celebrities ranging from Beyonce to Michelle Obama to Serena Williams.