Susan Reynolds - 250 Personal Finance Questions for Single Mothers: Make and Keep a Budget, Get Out of Debt, Establish Savings, Plan for College, Secure Insurance

THE
PERSONAL
FINANCE
QUESTIONS
for
Single Mothers

SUSAN REYNOLDS AND
ROBERT BEXTON, CFA

Copyright 2009 by F+W Media, Inc.
All rights reserved. This book, or parts thereof, may not be reproduced in any form without permission from the publisher; exceptions are made for brief excerpts used in published reviews.

Published by Adams Business, an imprint of Adams Media,
a division of F+W Media, Inc.
57 Littlefield Street, Avon, MA 02322. U.S.A.
www.adamsmedia.com

ISBN 10: 1-59869-965-2
ISBN 13: 978-1-59869-965-4
eISBN 13: 978-1-44051-419-7

Printed in the United States of America.

J I H G F E D C B A

Library of Congress Cataloging-in-Publication Data
is available from the publisher.

Contains material adapted and abridged from The EverythingGuide to PersonalFinance for Single Mothers, by Susan Reynolds and Robert Bexton, copyright 2007 by F+W Media, Inc., ISBN 10: 1-59869-248-8, ISBN 13: 978-1-59869-248-8.

This publication is designed to provide accurate and authoritative information with regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional advice. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.

From a Declaration of Principles jointly adopted by a Committee of the
American Bar Association and a Committee of Publishers and Associations

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DEDICATION

This book is dedicated to all single mothers who are working diligently to create a brighter future for themselves and their children you can do it, ladies!

ACKNOWLEDGMENTS

We wish to thank Adams Media for its quest to provide substantial, yet easy-to-understand, financial books that genuinely help women improve their finances. In particular, wed like to thank Chelsea King, Paula Munier, and Lisa Laing for the opportunity to provide this helpful guide.

CONTENTS

INTRODUCTION

Like it or not, a divorced, widowed, or a not-yet married or never-married mother is a woman on her owna woman forced to take responsibility for every aspect of her newly single life (kids or no kids). A divorced, widowed, or unpartnered mother has to deal with financial realities and make financial decisions that will affect herself and her children for decades. An informed single woman must, indeed, develop the skills and the confidence to make smart decisions and gain control over her financial reality.

Divorce is a financial disaster for most families and for the economy. Almost half of all divorced fathers fail to make their child-support payments. Only 25 percent of divorced fathers pay full child support, but even then it is far more likely that the divorced mothersalong with the childrensincome has decreased substantially. Average visitation for divorced fathers is around once a month, and divorced women with minor children make up a major segment of Americans living below the poverty line. In addition, single mothers often sacrifice their own welfareincluding financial for the sake of their children.

This book has been researched and written to steer you through whatever personal financial minefields you are navigating and to help you build an operational vocabulary that will give you a real leg up on handling your personal finances. It is designed to be an invaluable resource as you find your way through the money jungle. As your family and finances grow and as you meet critical financial turning points in life, like the purchase of a home or helping your child pay for his or her college education, the advice in this book will guide you. If you apply this information to your finances, you will be on the way to achieving your financial goals and claiming financial independence, one step at a time.

Chapter ON YOUR OWN... AGAIN

WHILE THERE CAN BE MANY, many benefits to being single, being a single mother presents an enormous challenge. Even if you came out of the death, divorce, or separation with a safe cushion of money and assets, you will now be fully responsible for all the financial decisions that will directly affect you and your children for decades to come. If you are not money-savvy, this could cause massive anxiety or lead to impulsive decisions that undermine your long-term security. Its time to gather yourself and begin again.

Question 1: What do I do if my husband suddenly dies or files for divorce?

First, you have to accept that absolutely everything has changed. You cannot go forward with a solid base if you dont get a firm grip on what your situation is now and from this point forward. You have to think for yourself, and think smart. The first precept might simply be do no harm. If you are uncertain what to do, keep the status quo until you feel more confident about your course of action. Focus on what requires your immediate attention: paying down debt or creating an emergency fund, for example. The firstand very importanttask is to discover and record all aspects of your financial situation, as follows:

Create a list of all your income.

Create a list of all credit card and loan balances.

Create a list of all retirement and savings accounts.

Create a thorough list of all monthly expenditures.

Create a temporary livable budget that reflects your new circumstances.

List and review insurance policies.

If needed, name your children as beneficiaries on insurance policies, CDs, bank accounts, and retirement plans.

Select guardians for your children.

Create a rudimentary will and a living will until you can more properly create a lasting one.

Other than fulfilling the necessary, immediate tasksestablishing how much money you really have to live on, how it will be dispensed, and what you have to work withits advisable to wait at least six to twelve months before making major or long-term decisions related to money. Even if you feel pressured, allow yourself time to steady your emotions and learn as much as you can about financial management before making major changes.