5 Critical Financial Steps Every Parent Needs to Take ASAP

If you are a parent, you know how much your child depends on you. If you are a single parent, that sense of dependence and responsibility can be even stronger. As a parent, you are a source of care, love, and stability for your child. This includes providing financial stability so that your family can live without stress and strife, and these must-have steps from True Fatherhood can help.

Securing Life Insurance

What would happen to your child if you were to suddenly pass away? If you are a single parent, being able to answer this question can be even more important. You can start to provide financial protection for your child by getting life insurance. Life insurance is a must for any parent but can be especially crucial when you are raising a child on your own. While the costs of raising your child may also make it seem impossible to afford life insurance, know that there are several options that can make getting the coverage you need less of a burden on your budget and your time. Whatever type of life insurance you choose, find a policy that works for your family.

Creating an Estate Plan

The next financial step that parents need to take is to create an estate plan. Just like life insurance, estate planning can be even more crucial for single parents, so make sure you know which steps to take if you are raising a child on your own. In terms of ensuring a financial future for your child, you may need to complete additional documents and processes since you are not relying on a partner to provide care for your child in the event of your unexpected death. This can include setting up a trust for your little one and ensuring that any life insurance proceeds go into that trust. You will also need to appoint legal guardians in your estate plan.

Planning for Retirement

As a parent, you may be focused on certain financial goals first, such as saving for emergencies or for your child’s future education expenses. While these can both be wise financial goals for parents to have, especially when it comes to being financially prepared for emergencies, you also need to make sure that your current savings goals will not negatively impact your retirement. In fact, for single parents, planning for retirement can be even more important since there is no second income to help pad your retirement savings. Even if you make more now, you still need to save more for retirement, but don’t think that doing so has to take away from your ability to also save for your child’s education. You can actually balance retirement and education needs with a few simple adjustments to your savings plan.

Paying Down Debts

You can pay off debts without the added expense of a financial planner, but it will take some research and work. Start by figuring out your debt-to-income ratio so that you will have a better picture of your current situation. Then you can start planning out ways to begin paying down the most pressing debts, like those with high interest rates, which may mean making some tweaks to your normal routine. You may need to cut out a few things, like eating out or watching cable, to live within your means, but being able to reduce your financial burdens will be well worth the sacrifice. Taking on a side gig can also be a manageable way for parents to pay down debts, and many of these gigs even allow single or SAH parents to work from home.

Making Sure Your Business Is on the Right Side of the Law

Owning a business and raising a family presents its own unique set of challenges. So, if you want to make sure your business stays out of trouble, you need to make sure that you’re taking the right steps. In addition to registering your business with the state where you live (you can use online formation services to help you in this department), you also need to carefully manage your finances and pay your taxes on time. This may involve making quarterly payments, which can help ensure that you’re paying enough money to cover the tax bill. Failing to do so could easily result in late fees and interest charges, which will ultimately take more money away from your business.

Being a parent, especially when you are a single parent, is never easy. You may always be worried about your child’s well-being and safety, but with a few adjustments to your budget and plan, you don’t have to be worried about your financial future. Checking the items above off your list can give you peace of mind, as well as give your child a more stable environment.

Author: Jenna Sherman

Photo Credit: Unsplash

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