Single mothers and single fathers need to plan for their financial security very carefully. Because there is only one parent, the parent has to give careful consideration as to how the children will consider their normal lifestyle, if something were to happen to the mother or father.
Because the single parent can only rely on one income, it is especially important to open an emergency fund to cover repairs on the automobile, emergency trips, and living expenses due to unforeseen events. This will help in time of need.
It is also important to designate a guardian in the event of the untimely death of the parent and to purchase life insurance to help cover the living expenses for the children. The addition of new family members could put an additional strain on the new family. A will would have to be created which would designate who the guardians will be. If guardians are not appointed, the state would designate someone who would be entrusted with custody of the children.
If the plan is for the children to go to college, the earlier the parent saves money toward this goal, the better. Since the children are relying on one income, parents can accumulate more money in interest if they start saving early. Additionally, there are state sponsored insurance plans available for the accumulation of college funding.
Some employers offer short-term and/or long term disability plans in the event of sickness or disease. However, the single parents should also consider a separate supplemental disability plan which would offer payments in addition to what the company offers. Often, the plan which is available at work is inadequate to continue paying for household expenses. One can secure a disability plan as a rider on some life insurance plans.
When purchasing health insurance at work, single parents should elect a plan with a low deductible and little or no copayments to protect the income. Since there is only one income, the single parent is more in need of a low deductible so that they can have the extra money for household expenses.
In conclusion, single parents need to be more responsible with their financial planning to ensure their families are protected in the event of emergencies and untimely death of the parent.