Your children are your top priority when youre a single parent.
You work hard to give them all your time, love, energy and money.
Single moms are also less likely to contribute to a 401(k) plan at work.
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In contrast, just 39% of single moms with one child had a 401(K).
It makes sense: Single parents have substantially fewer resources than childless adults or married couples.
They also bear enormous financial responsibility that falls entirely on their shoulders.
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But planning for your own future is just as important as securing your childs future.
Here are seven things single parents can do to plan for retirement on any budget.
This should be your top priority.
Most experts recommend saving at least three to six months worth of living expenses in a savings account.
Think of your retirement money as untouchable and your emergency fund as a safety net.
Next, get your debt under control.
Its easy to run up credit card debt when youre a single parent.
If youre struggling to afford monthly payments, it doesnt make sense to start saving for retirement.
You dont want to have to pay for debt on top of all these other obligations you have.
Thats free money, James told The Penny Hoarder.
And the earlier in life you’re free to start saving, the better.
Time is your friend when it comes to long-term investing.
If thats your situation, look into opening anindividual retirement account(IRA).
Or you could use a robo-advisor likeBettermentorWealthfront.
These online platforms automatically create a diversified IRA portfolio for you, based on your age and risk tolerance.
Set Your Savings to Auto-Pilot
Youve probably heard the phrase set it and forget it.
Its a golden rule in retirement planning.
Life will hand you plenty of distractions, including financial pressures and responsibilities.
This way, you dont have to think about whether or not to save for retirement.
It just happens automatically.
Any 401(k) contributions are automatically deducted from your paycheck.
you could also easily set up recurring contributions with any IRA provider.
Only Save What you might Afford Not to Spend
Your retirement fund isnt your emergency fund.
Any money you put in should be money you wont touch for the next 20 or 30 years.
Experts say you should allocate 10%, 15% or even 20% of your income to retirement.
But thats not realistic for many people, especially single parents.
Its important to start where you are, James said.
Even if its just $25 or $50 a paycheck, its OK to start small.
Youll also owe income tax on the withdrawal.
You want to keep as much of your money as possible not hand it over to the government.
So be honest about what you’re able to afford to contribute and stick to it.
Explore Your Insurance Options at Work
Many employers offer health insurance and life insurance to their employees.
But if youre a single parent, there are other types of insurance you should also consider.
Many workplaces also offer critical illness, disability and/or accident insurance.
Each policy differs, so find out the rules and stipulation of the specific policy your workplace offers.
For example, some disability insurance policies have a waiting period before benefits start paying out.
Being frugal is important.
But so is making more money.
The situation is even more challenging for single mothers because women still, on average earn less than men.
According toBureau of Labor Statisticsdata, in 2020, womens annual earnings were 82.3% of mens.
The gap is even wider for many women of color.
The easiest way to make more money long-term is to get a raise at work.
The second easiest way to make more money is to get a different, higher-paying job.
Learninghow to ask for a raiseat work is important.
Be OK with stepping outside your comfort zone, and dont get complacent.
Exploring educational opportunities is also important.
See whatcertificationsyour company will pay for or check out free online classes.
it’s possible for you to also exploreside hustlesand part-time jobs.
you’re free to turn your passion or hobby into something that brings in income, James said.
Especially now, theres a lot of ways to make money online.
You dont want to hustle at a side job only to put that money toward babysitting.
Here are 11side gigs you’re able to do from home.
Learn to Prioritize Yourself Your Kids Will Understand
Many single parents want to save for their childrens college education.
Its always smarter to prioritize your retirement over your kids education.
It may sound harsh, but think of it this way.
Those benefits might not be much, especially if you had employment gaps during your working years.
You might be forced to live on $1,200 or less a month.
Its extremely difficult to survive on that amount of money.
Youd likely need to lean on your kids for help move in with them or ask them for money.
Dont feel guilty about prioritizing yourself.
Plenty of other parents are in the same boat.
Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder.
(Can you sense my millennial sarcasm there?)
You know which ones were talking about: rent, utilities, cell phone bill, insurance, groceries…
