Savings for single parents
Saving for your children’s future is tough – and doubly so if you’re a single parent.
One in every two moms in South Africa is a single mom, and only 16% of the fathers of these children contribute to the children’s costs.
In addition to supporting her own children, one in every three moms is also supporting one or both of her parents. What’s more, the number of young adults aged 18 to 34 who are living at home with their parents is rising: it increased from 42% in 2016 to 49% in 2017. These were some of the findings of the recently released 2017 Old Mutual Savings & Investment Monitor, which surveys the behaviour and attitudes of South Africa’s metro working population.
Saving for a child’s future expenses, such as education, is therefore absolutely crucial, particularly if you consider that education inflation outpaces normal CPI inflation. But day-to-day expenses such as food, clothing and daycare tend to take immediate priority and can make saving for the future difficult.
Old Mutual offers single parents these saving tips:
- Start putting money away regularly into an account from the moment you find out you are pregnant, even if you start with as little as R170 per month. Just start.
- Pay off your debt as fast as you can. The cost of servicing your debt will likely be more than the return on your investments, so deal with the debt first.
- Planning ahead is absolutely crucial. Ask a financial adviser to help you draw up a realistic financial plan – and then stick to it.
- Differentiate between needs and wants – and cut out all unnecessary expenditure.
- Live within your means. Don’t let your kids pressurise you into buying things they want just because their friends have them.
Old Mutual also offers you a tax efficient, flexible way to save: the Old Mutual Invest Tax Free Plan.
Plus it gives you access to the Old Mutual Maximised Interest Fund, which is a low-cost and low-risk investment that will give you a stable return. The interest rate is fixed for three months at a time, and is currently 8.81%. You can make withdrawals at any time, but the recommended minimum investment term is between 1 and 5 years.
Find out more about the Old Mutual Invest Tax Free Plan
For more on the Old Mutual Maximised Interest Fund click HERE