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Your children are your top priority when you’re a single parent.
You work hard to give them all your time, love, energy — and money.
It’s natural to put your own financial needs on the back burner, especially when it comes to saving for retirement.
According to a research study published in the Journal of Family and Economic Issues, having multiple children in a single-parent household was associated with lower motivation to save for retirement — especially for single moms. Single moms are also less likely to contribute to a 401 (k) plan at work.
About 68% of married women between the ages of 25 and 44 with one child said they have a defined retirement contribution plan — like a 401(K) — at work. In contrast, just 39% of single moms with one child had a 401 (K).
It makes sense: Single parents have substantially fewer resources than childless adults or married couples. They also bear enormous financial responsibility that falls entirely on their shoulders.
But planning for your own future is just as important as securing your child’s future.
Here are seven things single parents can do to plan for retirement on any budget.
1. Create an Emergency Fund and Get Your Debt Under Control
Before you start saving for retirement, create an emergency fund. This should be your top priority.
Most experts recommend saving at least three to six months worth of living expenses in a savings account.
Any money you save for retirement should be separate from your emergency fund. Think of your retirement money as untouchable and your emergency fund as a safety net.
Next, get your debt under control.
It’s easy to run up credit card debt when you’re a single parent. If you’re struggling to afford monthly payments, it doesn’t make sense to start saving for retirement.
“Debt that you can’t afford can be a huge hurdle as a single parent,” said Ann James, an accredited financial counselor and founder of Financial Freedom Battle Buddies….
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