Life Stages
I look to the future because that's where I'm spending the rest of my life.
Flying solo
Being a single mum may be one of the toughest challenges of all. You're busy juggling finances, dealing with the kids, maybe battling to find a balance between work and home by yourself and you don't need any more disruptions in your life.
Protect your income
Financially, the most important thing for you may be income protection insurance. If you are the sole breadwinner, your family relies on you -- so don't jeopardise it all. You can apply for income protection insurance through your super fund with the premiums paid directly from your account, so you aren't hit with an up-front payment.
With all the other bills to pay it may be tempting not to contribute to super, but even contributing a few dollars a week will give you greater security in the long run. And don't forget, by making small contributions you may qualify for the Government's co-contribution scheme, which will put further dollars into your nest-egg.
In fact, as a single mum you may need every dollar you can get, so check what benefits you are entitled to from Centrelink and check the Tax Office website www.ato.gov.au to see what sort of tax breaks you may be eligible for.
Sort out your budget
Then, it's a case of sitting down and doing a monthly budget. This will show up your spending needs and habits, as well as help you track how the money flows in and out.
If you haven't been keeping records, start now. Gather all your bills, credit card statements, cheque book and receipts for your groceries or anything else you buy and keep a note of the little cash payments, such as coffee and chocolate.
Do this for a month or so then you will be ready to sit down and do a budget. It doesn't matter whether you use some budgeting software or just keep a notebook -- the important thing is that you are taking control and learning where the money goes.
The first step is to divide your spending into fixed costs and variable costs. Your fixed costs will include such things as mortgage payments, rent or loan payments. Your variable costs will include such things as clothing, food and entertainment.
Now you're in a position to decide if anything has to change. Pay your bills on-time to avoid late fees, reward yourself for your savings efforts and stay motivated by setting goals.
It's also important to look after yourself, so set aside some time and money -- a little pampering will soon revitalise you and help put things into perspective.
Checklist
- Keep a spending record to help you manage your money
- Make sure your income is covered if you have an accident or fall ill
- Try to maintain extra small contributions to your super.
