Becoming a single parent often means major changes with finances. Even if you receive child support and/or alimony, you find that the purse strings are tighter. Considering that you would be paying a mortgage or rent on your own, along with all the other responsibilities associated with children, money does not seem to stretch as far as before. Obviously, working with a good budget is one of the most important steps to take but I wanted to address some other financial issues that are often overlooked.
For instance, life insurance is often one of the first expenses to go. Unfortunately, life insurance is also essential for anyone who has dependent children. Heaven forbid that anything should ever happen to you but if you are single, especially from the death of a spouse, you want to do all you can to set your children up. Yes, you may need to cut back somewhere but I strongly recommend you not discard the life insurance.
Okay, so how do you determine what kind and how much insurance to buy? You could talk to a reputable insurance agent, which is always a good idea but before you settle on anything, do your homework, and talk to at least three agents. For instance, various factors are considered to include the number and age of the children, your income, asset value, level of debt, and so on. Even with this, you should purchase between six and eight times your annual salary if possible.
Once you decide on the insurance plan, you would need to choose a beneficiary for the policy. Now, if the children were young, then you would need to set up a trust fund, as well as have chosen a guardian for the children. However, if the children were older, you could choose the oldest child, the most responsible child, or break the money down equally amongst them all. Just remember, you need to prepare the future for your children, which is how life insurance can provide them and you peace of mind.