Financial tips for single moms during lockdown

Picture: Reuters

Picture: Reuters

Published May 7, 2020

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Most people facing financial turmoil frequently suffer from stress, confusion, and loss of confidence. We know that different financial crises affect different sectors of the economy. In the case of the Covid-19 lockdown the sectors heavily affected are restaurants, the travel sector, live-out domestic help, and the entertainment industry. Many of these have a lot of women who work in them. All sectors of the economy are under stress, with many employees facing the reduction or loss of income.

Many single moms are risk averse and have a tight monthly budget, which does not allow for a high level of savings to fall back on during a financial crisis. To make things worse, many single moms rely on maintenance payments from their child or children’s father. Maintenance orders are legally enforceable court orders, but if a father loses his job or has his income cut, he can approach the court to reduce maintenance payments due to loss of income beyond his control. As this reduction is likely to be granted – you can’t get blood out of a stone – single moms are likely to be in an even more precarious position.

Over the past few years, many employees have seen the cost of living increase at a far higher rate than their salary increases. They are already financially ‘stretched’, and many have high levels of debt. Often parents borrow money to further their children’s education. In a financial crisis with a concomitant decrease in in formal employment opportunities, parents have increased debt.

In addition to working an eight-hour day, single moms working from home during the Covid-19 crisis also have to entertain or assist their children with distance learning. Distance learning requires connectivity. Many children do not have access to devices and there is also the stress of unbudgeted costs of additional data.

There are solutions:

Don’t procrastinate. It’s important that you force yourself to take control of your situation, even if you take small steps.

Rework your budget and stick to it. Maybe it is time to look at a cheaper school or a cheaper place to live

Stop using your credit card. If you have debts, settle the most expensive debt first, such as personal loans and credit cards

If you have time of work, use this additional time effectively. You can increase your professional education, sharpen your skills, and even volunteer your services. This can be done pro bono or at a reduced rate. This beats getting bored or depressed and will allow you to gain experience and make new contacts

If you have lost your job, this could be an opportunity for you to start your own small business. The government and private enterprises have programmes and funds in place aimed at providing access and funding to women-owned businesses. Some examples of these are:

Enablis Acceleration Fund

Business Partners Women in Business Fund

NEF Women’s Empowerment Fund

Isivande Women’s Fund

IDT Managers Funding Alitheia Identity Fund

If applicable, apply for UIF. This can only be done if you and your previous employer were contributors to the fund

If you are in good standing with your bank and cannot meet your short term credit payments, contact them to discuss relief measures. You can also apply for instalment reductions for a certain length of time. However, interest on the loan will still accumulate and have to be paid in the long term

Many insurance companies are offering a three-month payment relief terms on your life insurance policies, and you may also request a premium holiday on your retirement annuity monthly premiums.

Look at alternative sources of income for example tutoring.

Don’t be embarrassed to ask friends or family for help. This need not be in the form of a financial loan, but might be assistance with childcare, grocery shopping or school lifts. This extra time will enable you to earn more income. You will be surprised at how many people are happy to help.

Tips to help your children:

Make a study timetable for your children

Implement some form of daily routine

You need to offer your children compassion, understanding, and empathy, but you also need to tell them the truth. If you are going to make financial changes to your family’s lives, they will be more accepting if you have been honest with them.

Talk to a friend or family member about your situation. Or join at online parenting forum like The Village on Facebook, where parents of tween and teens can vent and share experiences. Take time to laugh every day and try not to forget to help others, it’s empowering.

Kerry Sutherland is a Senior Financial Consultant at Alexander Forbes

PERSONAL FINANCE 

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