Financial Planning for the Millennial – Single Parent Edition

Being a parent may be one of the most rewarding things we will ever experience in our lives, but with that reward comes a lot of responsibility. Some of us have a spouse to lean on during tough times for emotional and financial support. But, when you’re a single parent you only have yourself to depend on, and so do your kids. So here are a few financial planning tips for single parents.

1. Disability/Critical Illness Insurance — Being properly covered is even more crucial when you’re a single parent because your family is relying on your sole income. Think about what will happen to your family’s finances if you become injured or sick and are unable to work, become critically ill and unable to earn an income. Use a small percentage of your income today to insure you receive an income no matter what happens.
2. Saving with an RESP — utilizing a registered education savings plan will allow you to access the 20% grant the Canadian government offers to parents who save for their children’s post-secondary education. Based on your household income, you may even be eligible for additional grants.
3. Life Insurance —  if something happens to you prematurely while your child(ren) are still financially dependent on you, life insurance is the most cost effective way to ensure that they can remain on the path you envisioned for them. Term life insurance is so inexpensive and can cover you for the right amount of protection during your wealth accumulation phase of life.