Financial Planning

Costs of single motherhood

According to research conducted by the Human Science Research Council (HSRC) and the South African Race Relations Institute (SARRI) in the past five years, more than 40% of South African mothers are single parents.

Regardless of whether single motherhood is by intent or not, the costs involved tend to be extremely high. Raising a child on one income is tough, and in South Africa this scenario applies mostly to women. The benefits of consulting a trusted financial planner at the outset for help with a practical plan based on a holistic view of the parent’s finances cannot be overstated.

Plan ahead

The demands of single parenting

The pressures of single parenting make it critical for single mothers to start saving as soon as possible to help them cope with any financial strain they may experience going forward. Single mothers need planning and structure to cope with the demands of working and looking after their children. The same planning will apply to their finances due to additional expense burdens, compared with dual-income families. In addition, costs associated with specialised pregnancies, ongoing expenses like day care and long-term goals such as a child’s education can add to the overall financial pressure on a single mother.

The Global Gender Gap Report 2020 of the World Economic Forum (WEF) estimates that men and women will have pay equality in 257 years’ time. This creates more pressure for single mothers especially to have proper financial planning.

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Some financial and general planning 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 may be a great option due to its tax benefits.

Make the most of maternity leave:

Try to accumulate savings to supplement your income while on maternity leave, as you will not receive a full income from your employer or the UIF. Temporary income protection 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:

Don’t let the costs of having a child compromise your future financial well-being. Work with a financial adviser to ensure you’re meeting your short-term needs while still saving for long-term goals like retirement.

Get dependable help:

Raising children will likely be one of the most satisfying and stressful experiences of your life. Single parents should try to implement the best possible support networks, such as babysitters or single-parent support groups.