By Renée A. Hanson
If you've recently become a single parent due to divorce or the death of a spouse, here’s what you should know from a financial standpoint:
1. Your best first action may be inaction.
Emotions—such as shock, anger, sadness, denial or grief—can affect your ability to make decisions that are consistent with your best long-term interests. Give yourself six months to a year to work through your feelings before you begin making major financial decisions.
If you've inherited a large sum of money, such as a life insurance policy death benefit, talk with your financial professional about the best place to deposit those dollars over the short term to give yourself time to process your new situation.
2. You need to take steps to help ensure your short-term financial stability.
Although you may feel overwhelmed by the demands upon your time, it’s important that you take care of the financial basics to maintain a good credit rating:
- Close joint banking accounts and credit cards and, when appropriate, open new ones in your name.
- Stay up to date on your bills. If you aren’t already signed up for electronic payments, now may be a good time to start. By investing a few minutes upfront to get started, you’ll save yourself time and money over time.
- Update your beneficiary designations and contact information on your financial and legal documents.
- Continue to regularly contribute to your savings program. If money is tight, it’s easy to sacrifice your long-term goals, such as building up cash reserves or saving for retirement, for the short-term benefits of your child or children (i.e. a week at summer camp). However, as a single parent, your financial security is fundamental for your family’s financial stability. So, you need to pay yourself first.
3. If you’re financially strapped, look for opportunities to live on less.
This includes reducing or consolidating your number of service subscriptions. For example, the cost of the following services can add up quickly and may be redundant:
- Television recording services
- Movie, magazine and newspaper subscriptions
- Home phones and cell phones with data packages
4. Consult a financial professional.
He or she can help you establish a financial strategy to help meet your needs.
Renée A. Hanson, CFP®, CEP®, CDFA™, CFS, is a private wealth advisor with Hanson, Ayala & Associates, a private wealth advisory practice of Ameriprise Financial Services, Inc. Her passion is in helping women achieve their dreams and financial goals, regardless of life’s many obstacles. Renée is licensed/registered to do business with U.S. residents only in the states of AZ, CA, CO, GA, IA, IL, MI, MN, MT, NH, NJ, NM, NY, OH, PA, SC, TX, VA, WA, WI. Please visit: www.reneehanson.com to learn more.
Become a member of the Fresh Start Community of women today: www.wehelpwomen.com.