Preparing for the cost of single motherhood

Last updated on 5th December, 2018 at 02:38 pm

Only a small portion of South Africans can afford solo parenting by choice. If single motherhood is on your horizon, there are important practical and financial plans you’ll need to have in place.

Danelle van Heerde, Head of Advice Processes at Sanlam Personal Finance, explains: “Raising a child on one income is tough, and in South Africa this scenario applies mostly to women. The benefits of engaging a trusted financial planner at the outset for help with a practical plan based on a holistic view cannot be overstated.”

Planning is critical

“Single moms need planning and structure to cope with the demands of working and looking after children,” says Van Heerde. “The same approach applies to their finances. They often have additional financial burdens, compared to dual income families. Plus, they have to factor in long-term goals like saving for their children’s education.”

In South Africa, women generally earn around 27% less than men, and this certainly frames their need for proper financial planning. Van Heerde offers some pointers for single mothers:

• No amount is too small: The effect of compound interest means that the earlier you start saving for the costs associated with parenthood, the better the returns. A tax-free savings account (TFSA) may be a great option given the benefit of tax-free returns.
• Make the most of maternity leave: If it’s at all possible, ensure that you accumulate savings to supplement your income while on maternity leave, as you may not receive a full income from your employer or the UIF. A temporary income protection or sickness benefit that covers pregnancy-related events will provide cover if you need to miss work during pregnancy or need to extend your maternity leave for medical reasons.
• Prioritise your needs: Work with a financial planner to ensure you’re meeting your short-term needs, while still saving for long-term goals like retirement. You’ll need to frequently review and revise these goals.
• Get dependable help: Raising children will likely be one of the most satisfying as well as stressful experiences of your life. Try to implement the best possible support network. This should not only include dependable babysitters, but also single-parent support groups. There are a variety of these online.
• Involve your kids: Involve your children in the household budgeting process as soon as they can understand what it’s about. Start with simple things for smaller children – the overall intention is to make them part of the process, so that they will develop an appreciation for budgeting as they get older.