How single mothers can secure their children’s future


Raising a child by single mother is toughest job in the world

A single mother needs to make smart investment decisions today to secure the life of her child.

Do you think it is easy to be a single mother, especially in a country like India? A single mother can be a divorcee, separated, widow, or a single parent by choice. Raising a child is not an easy task for parents, and the situation is more challenging and tough for single moms. Single mothers face several issues in our society, such as financial problems, emotional challenges, and lack of support. If the single mother is a widow or a divorcee, her life can be challenging, especially if she is not working. Even if a single mother has to face many issues, lack of financial support can be the toughest among them. The situation can cause anxiety, stress, and limited options. Many single mothers feel guilty of not providing enough for their children. As a single mother, you need to plan ahead to manage each financial situation. Let’s check how single mothers can get a grip on their finances through mutual funds.

Need to take smart investment decisions

A single mother needs to make smart investment decisions today to secure the life of her child. The investment decisions that she makes today will determine the future of her son or daughter. As a mother, you would like to give the best education, opportunities, and experiences available in the world to your child. To avail this prospectus, you need to identify your source first for the smooth flow of funds to make the ambitions of your child a reality. A single mother can find different ways to safeguard the financial future of her child. Investing in mutual funds is one such great to option to secure her child’s future. You can find suitable plans in equity mutual funds and debt mutual funds for investing regularly for your child.

Financial planning tips for single moms

Being a mother is certainly one of the toughest tasks in the world, and the position is more testing for single mothers without the support of a husband. Planning the future of children is important, but a challenging task for parents. It must be more challenging for single mothers as she needs to ensure giving her child a smooth life and good education. Aside, it is important her to be a financially independent individual. Let’s check how a single mom can make a better financial plan to secure her children’s future.

  • Maintain an emergency fund

Every single mom should ensure to have an adequate emergency fund to keep her finances on track. This fund comes handy whenever she faces any financial emergencies such as unexpected illness, accidents, sudden job loss, or any other unfortunate situations that may obstruct her regular flow of income. You should be wise enough to keep your emergency fund in such savings accounts that offer you good interest rates. Consider choosing women’s savings accounts instead of regular saving accounts to park your emergency fund as it offers several additional benefits like discounts, cash back on certain spend amount and accidental insurance.

  • Invest in mutual funds through SIPs

Each parent dreams of giving the best higher education for their children and needs to invest properly for fulfilling this dream. Investing in equity mutual funds is the best way to reach such long-term financial goals.  Equity mutual funds can offer higher returns in long-term investment plans, compared to other investment options like FDs, ULIP, or PPF. Another benefit of investing in equity mutual fund is that it can beat inflation by a considerable margin. SIP is the best way to invest in a mutual fund as it would ensure a regular and disciplined investment opportunity to you. Remember to start investing early as the more time you would be able to invest, you can accumulate a massive corpus and reap higher returns.

  • Opt for a term insurance and health insurance

A single parent should always take care of the uncertainties of life to secure her child. It is important to make your child financially stable in life even in your absence, and you can ensure that by opting for term insurance. An assured amount will get to your child through term insurance in case you demise untimely. Choose term insurance that covers an amount of at least 10-15 times more than your present annual income. You can also consider buying health insurance to deal with medical emergencies.

Benefit of investing in a SIP

The emotional ordeal of bereavement or loneliness may prevent a single mother from thinking logically, but she needs to assess her financial situation first to take the right decision to select the best investment option to secure her children’s future. There is no better way to attain long-term financial goals than investing in mutual funds through a SIP. A Systematic Investment Plan (SIP) acts as a recurring deposit, and it is a great investment option for all people who look for an ideal investment choice. Since the rate of interest that an individual will receive on his or her mutual fund investment depends on the performance of the equity markets, many people find it as a great investment plan. It helps them to secure better returns with long-term investment.

Many investors prefer investing in mutual fund through the systematic investment plan for long-term financial goals. Equity-linked mutual fund investment schemes are suitable for everybody, be a single mother or a smart working woman as it helps them to save tax under Sec 80C of the Income Tax Act.

Mutual funds to grow your money

You face challenges irrespective of the situation that makes you a single mother, whether by circumstances or choice, especially when it comes to financial matters. As a single mother, you can overcome such challenges by putting some thoughts into your investments. Mutual fund schemes are an ideal choice for single parents to cope with their financial situations and can save and invest for their children wisely. If you have not yet started investing in mutual funds and require a large sum of money within eight to ten years, then you can consider equity mutual funds to invest. Equity-oriented hybrid plans are the best suggestions for first-time investors. The main advantage of this plan is you can invest in both equity and debt schemes. However, hybrid mutual funds are with medium risk and medium return than investing in pure equity funds. Apart from that, these schemes can offer you an annual return of nearly 11.8%.

 

How can mutual fund investments help a single mother?

The power of an SIP: There is no better way for single moms for long-term wealth creation than start investing in an equity fund through a SIP. Acting like a recurring deposit, it has the features of regular monthly savings.

Tax benefit: Investing in Equity-Linked Savings Schemes every year helps an investor to reduce the tax burden, but at the same time, it has the potential to create long-term wealth.

Regular Income: As a single mother, you can opt to invest in fixed income funds for your short and medium-term financial needs as these funds help to generate income.

Investing in gold funds:  Women love gold, and the metal always appeals to them. Invest in Gold can be a good option for single mothers to generate wealth. If you are interested in investing in a Gold Fund, you can go for a Gold ETF or a multi-asset or hybrid fund as such plans can offer not only a mix of equity but also gold asset classes and fixed income.

As a single mother, you need to take calculated decisions throughout the cycle of motherhood to secure your child’s life at all times. A single mother will not be able to make a large pool of money with the above investment options to meet the requirements of her child, but it helps her to accumulate a reasonable amount to secure her child’s future. All your emotional scars will get healed over time, but if you do not get a grip on your financial matters, you may regret later. Investing in mutual funds is an amazing way to secure the future of your child. Start one or more SIPs in a few balanced equity funds today to generate long-term wealth to give better higher education to your child and secure his or her future.

That’s why Comparte Investment team asks do you have “Nivesh Ki Aadat”.

With this one can say “Mutual Fund Sahi hai”, so let me do Nivesh