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04 Dec 2015 00:00
Nolene Parboo, senior manager of deposits for Standard Bank
Miriam* is a 30-something single parent to two kids. She’s also self-employed, with an unpredictable income. “So it is a case of prioritising the bare necessities — rent, petrol, insurance and salary for my domestic helper,” she says. “I don’t have a family support structure and without her assistance it would be impossible for me to see to my two kids, study and work. I’ve managed to cover the basics, but with a minimal maintenance order I still cover the majority of my children’s expenses.
I seldom buy personal items, and hesitate before making household purchases — often my grocery budget is hit hard if there are unexpected expenses such as vehicle repairs or an increase in utilities.
I’m a single mother too, to an 11-year-old boy. We are blessed in that we live at home with my parents, and my dad takes care of his school fees (which are currently sitting at just over R20 000 per annum); so that’s two major expenses out of the way. Still, finances are never far from my mind and approaching the end of each month, it’s not uncommon for my bank balance to be sitting at a few hundred rands. And that’s when the real panic sets in.
According to Nolene Parboo, senior manager: Deposits for Standard Bank, one-third of children grow up in single-parent homes, and it is estimated that 50% of working mothers are single. Parenting in general is not for the faint-hearted, she says, and it can be even more overwhelming if you are a single parent, because “…you have to cook, shuttle, sports coach and tutor,” she says. “So go easy on yourself.” Parboo says it’s perfectly understandable that, as a single parent, the management of your finances may not be executed as efficiently as you may like.
“Since single parenting may mean a single source of income, it is even more important to get on track with all of the financial aspects that affect you and your children,” she cautions.
In Miriam’s case, this entails sticking to a monthly budget as far as possible. “No luxuries unless I have basic groceries for the month,” she says. She also tries to have her rent paid at a least a month in advance, and chose income protection insurance and a retirement annuity package over upgrading a car she’s owned for over a decade. “I started saving later than I should have,” she admits. “But since my kids were babies, I opened investment accounts and monies they received as gifts and additional income would be transferred into these long-term accounts before I was tempted to spend on other things.”
I was an even later starter than Miriam and boy, did I pay the price. For years, my brother had been nagging me to get onto a hospital plan or medical aid, and due to my chronic fear that I wouldn’t be in a position to meet the monthly payments, I delayed considerably, only signing up in the middle of last year. As fate would have it, my son had to be hospitalised (severe dehydration) shortly thereafter, but due to the compulsory waiting period on my hospital plan, I was faced with the embarrassment of having to take a loan from my best friend at the hospital reception.
These days I’m more budget-conscious, but still have a long way to go before I’m as disciplined as Miriam is (when my son walks out of a school, hot and tired after an intense cricket training session, and asks for a cool drink, a cool drink is what I get him).
A budget is essential, says Parboo: “Even if you are not the type of person to document every cup of coffee or chocolate bar you buy, at least have a ballpark figure of how much you will spend each month in the various expense categories … if you don’t do this, you will constantly be asking yourself where the money went. If you focus on your spending each month, you will soon realise that the R20 you give to the kids every day for the tuckshop or your designer energy drink habit is draining your wallet. Drawing up even a loose budget can keep expenses in check.”
It is also a rule of thumb that you have three to six months expenses saved in a call, savings or money market account, she says. “This is especially important if you are single.” If your budget is tight, Parboo advises selling off the stuff you are no longer using. “Or make a pledge to yourself that you will not eat out or buy new clothes until you have built up a safety net. This provides peace of mind and a buffer in the event of a financial emergency.”
Er – but where do the kids come in here? What if they want to eat out, or are insisting that it’s time to cough up R800 for the latest PS4 release? “Communicate with your kids about spending, to differentiate between what is important and necessary and not so,” says Miriam. “I don’t buy toys etcetera and encourage my nine-year-old son to earn pocket money doing chores to sustain his hobbies. We negotiate outings and try to opt for outdoor activities that cost less rather than movies, entertainment centres and gaming devices. I also reinforce the fun factor and marvel at out how little a day at the beach has actually cost.”
Death is something few people like to face. But it is inevitable, and if you have young children, there really is no choice — you need to plan for every scenario, even the dreaded one in which you do not feature. “The consequences of not planning your estate can be dire. Think about who will take care of your children in the event of disability or death,” says Parboo. “Make sure you have adequate life insurance and disability cover. Work with a financial consultant to get your estate planning documents in order; these include a will, guardians and carers and a nominated executor of your estate. Don’t assume that your employee benefits will be sufficient, find out how much they will cover — chances are you will need to invest in more cover.”
I’m fortunate in that I get to choose my hours of work, and these are usually confined to the period during which my son is at school. But the nature of my work means that it’s not uncommon to find me typing away, either on my phone or on my laptop, in the presence of my son. I try to make up for this by planning a year-end holiday for the two of us which is uninterrupted by work.
“A single parent often does not have the luxury of staying at home with the kids; they may have to work long hours to support the family. The key to keeping the balance is to explain to your children the importance of your job, and then ensure that you spend quality time with them on weekends,” says Parboo.
*not her real name
Tips for easing financial stress from single moms
• A good place to start is to speak to a financial advisor about structuring what you do with your income so that you save for yourself for when you cannot work.
• Consider your level of risk objectively and do a detailed budget, keeping track of your expenses and income.
• Always be open to opportunities to upgrade your work or studies so that may be a way to earn a little extra for the ever demanding high cost world we live in.
• Spend according to your means and not according to society’s standards. In this way you allow yourself to be at ease, knowing you have something extra to spoil yourself or your child with, or to set aside as an investment.
• Invest in a healthy lifestyle. With so many responsibilities it may be tempting to opt for convenience foods and give In to children’s demands because you don’t have the time to tend to them as you may like to, but spending on healthier and fresher food items, and keeping them and yourself active saves a packet on medical expenses and loss of income due to stress and illness.
• Everyone needs a break – not least of all, single parents. Consider a holiday savings fund; and allow yourself an opportunity to get away with your children at least once a year. It doesn’t have to be a trip to Disneyworld; any place close to a beach/swimming pool will do (depending of course, on what your children enjoy doing).
• Don’t scoff at hand-me-downs and chain-store brands, and teach your children not to do so. Children outgrow their clothing and shoes rapidly – it isn’t wise to spend thousands of rands on brand names; or to turn down perfectly decent clothing from your friends and family. — Fatima Asmal
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