I'm a single parent. How might I get ahead financially?
As a single parent, you need to understand the financial strategies that could help stretch your income and help you lay the groundwork for a more secure future. Consider the following lessons to help improve your family's bottom line:
Identify your goals
You can't have a financial strategy without first defining your financial goals. Start by recording all of your short-, medium-, and long-term financial goals.
For example, a child's education could be one of the biggest expenses in your future. Setting aside money for emergencies and planning for retirement are other important goals you'll need to keep in mind while raising a family. Don't let day-to-day concerns distract you from such important goals. Plan for today and tomorrow.
Be a better budgeter
To pursue your family's goals, it's necessary to manage your household's cash flow. That involves tracking income and spending, eliminating unnecessary costs, and living within the confines of a realistic budget.
For example, if you spend $2 each work day on a take-out coffee, that amounts to about $40 each month. By eliminating that minor expense from your budget, you could easily save almost $500 per year.
Say no to debt
High-interest credit card debt can make it extremely difficult to get your budget in order. If you have an outstanding balance, consider paying it off as aggressively as possible. The savings in interest alone could allow you to address other important financial goals.
It's also a good idea to review your credit history, commonly referred to as your credit report, to make sure that the information it contains about your past use of credit is accurate.
Capitalize on tax-advantaged accounts
Once you free up some cash, apply it toward your goals. But first, learn about the savings and investment opportunities available to you. Keep in mind that tax-deferred investment accounts may enable you to grow the value of your assets more significantly than taxable accounts. Examples of such accounts include 401(k) plans and individual retirement accounts (IRAs) for retirement planning.
For education savings goals, consider Section 529 savings plans. These plans are state-sponsored investment programs that allow tax-free withdrawals for qualified educational expenses. Savers who contribute to their home state's 529 plan may be eligible for state tax breaks.
Note that investing in 401(k) plans, IRAs, and 529 plans involves risk, including loss of principal.
© SS&C. Reproduction in whole or in part prohibited, except by permission. All rights reserved. Not responsible for any errors or omissions.
The material was authored by a third party, DST Retirement Solutions, LLC, an SS&C company ("SS&C"), not affiliated with Merrill or any of its affiliates and is for information and educational purposes only. The opinions and views expressed do not necessarily reflect the opinions and views of Merrill or any of its affiliates. Any assumptions, opinions and estimates are as of the date of this material and are subject to change without notice. Past performance does not guarantee future results. The information contained in this material does not constitute advice on the tax consequences of making any particular investment decision. This material does not take into account your particular investment objectives, financial situations or needs and is not intended as a recommendation, offer or solicitation for the purchase or sale of any security, financial instrument, or strategy. Before acting on any recommendation in this material, you should consider whether it is in your best interest based on your particular circumstances and, if necessary, seek professional advice.
Because of the possibility of human or mechanical error by SS&C or its sources, neither SS&C nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall SS&C be liable for any indirect, special or consequential damages in connection with subscriber's or others' use of the content.
Banking products are provided by Bank of America, N.A. and affiliated banks. Members FDIC and wholly owned subsidiaries of Bank of America Corporation.
Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.
MAP4771974-06212023