Statistics aside: single moms and saving

In that deduction, there is a key conversation that should be addressed, which is the financial difficulty and setback that single moms could face given this reality. Statistically, women are also more likely not to have a solid retirement plan in place which invests in their future.  

There are a multitude of reasons why women have fallen behind men when it comes to saving and investing. The statistics can be overwhelming and disheartening to a single mom who already finds herself on the depressing end of those statistics. Financial jargon piled onto a care-giving individual who already feels the ongoing stresses of being a single mom tends to make them run the other way when you bring up the topic of saving.

It is important for us to ensure our clients can retire with sufficient retirement savings to carry them through to the end of their life. They need to have enough savings to cover unforeseen medical expenses, which tend to become more frequent as one grows older, and with emergency funds to cover any other unforeseen expenses that can happen at any time. When clients don’t have this in place, they tend to become frustrated because they know what they should do and they know what they need, but they just may not have the means to do it right now, nor do they have the energy or time to necessarily investigate their options in their own time.

Addressing the issue

If you are a single mom, this task can be daunting. However, you are not in it alone and we can assist you to consider what-if scenarios and put a tailored financial plan in place which is aimed at taking common risks into consideration.

Your first step should be to assess your budget. Be honest with yourself. You know where you tend to overspend and where you can cut back. Do this on a monthly basis to get a firm grasp on your in- and outflows. Seeing your financial situation in front of you on paper or on a screen, gives you the power to manage it more effectively.

Two primary areas to focus on when it comes to saving, is saving for retirement (in the event that your employer does not offer a retirement savings structure, or you have fallen behind for some reason) and saving towards an emergency fund to cover at least three to six months’ expenses should an unfortunate event occur, that may otherwise cause you to go into debt. Once you have those under control, you can start saving towards other needs, like education for your child, implementing life cover in the event of your death, or whatever your specific circumstances may require.

Leave some room to wiggle in your budget. Soaring inflation and even higher electricity hikes can quickly add up. You don’t want to end up having to withdraw what you’ve saved to cover daily needs because you didn’t factor in these variables.

Set goals. Saving, especially for those who are not financially secure, has a somewhat negative connotation in that it’s done to prevent yourself from experiencing a financial shortfall at retirement, or to cover yourself financially in case of an emergency. While you should feel good about addressing these issues, you need to reward yourself from time to time to make it worth your while. Start with a three-month goal on your emergency fund, and reward yourself by saving for something like a holiday away (or whatever else tickles your fancy) before working towards your six-month emergency fund. Discuss your goals in detail with your financial adviser to ensure the best investment vehicles are used within your determined risk profile to address your needs and goals.

Finally, give yourself a pat on the back for doing something about a subject that so many single moms have trouble facing. Once you’ve taken the steps towards securing your financial future, make sure to check in with your financial adviser at least once a year to track your progress and address any changes in circumstances, whether market-related or personal.

The opinions expressed in this article are the opinions of the writer and not necessarily those of PSG. The information in this article is provided as general information. It does not constitute financial, tax, legal or investment advice and the PSG Konsult Group of Companies does not guarantee its suitability or potential value. Since individual needs and risk profiles differ, we suggest you consult your qualified financial adviser, if needed.

PSG Wealth Financial Planning (Pty) Ltd is an authorised financial services provider. FSP 728