It’s never easy to be single with a child. Like other couples, they have to bring up their kids properly and also make ends meet — but all on their own.

The situation can be even more harrowing for those who do not have any financial resources to fall back on and are not qualified enough to get a well-paying job.

A single parent can be:

A widow(er): Such parents may receive assets or lump sum amounts from life insurance policies and other investments of their spouses, which, if invested properly, can provide them with a regular income.

A divorcee: Such people can breathe somewhat easy if they receive adequate child-support payments or alimony from the estranged spouse.

Single by choice: They are generally well educated and come from financially successful backgrounds. They usually do not have any financial problems.

Here are a few tips for single parents on how to mannage their funds to provide well for their children and themselves.

Organise finances

If you have recently become single, try to understand your financial position, especially if your spouse was the one who handled the finances. Make a list of your assets, investments, bank accounts and liabilities — such as loans — to get a clear picture of your net worth and liquidity. Delete the name of your spouse as the nominee or joint holder of your assets.

Try to pay off high-cost loans such as personal loans and credit card debt, even if you have to liquidate some assets for that.

Remember to value your assets at current market prices as many of them, such as equities, could have depreciated in value, while others, such as real estate, may be of more value than stated.

You need to balance your existing asset allocation considering your time horizon and risk-return profile to invest your money wisely.

You need an income for current needs as well as capital appreciation to build a retirement corpus for yourself and to plan for your children's education and marriage.

First, work out whether your assets are sufficient to do these two things. If you are not adept at making financial plans, consult a professional. Meanwhile, learn as much as you can about financial matters. Try to fill in your cheques, forms, investment and redemption transaction forms personally. This will give you a lot of practical knowledge.

Budget your expenses

Try to arrive at a realistic figure of how much money you and your children will need. If you have been through a divorce, please remember while budgeting for expenses that costs of living separately are higher than the costs of living together. To ensure smooth liquidity, try to match the timing of salary, pension or alimony receipts with expenses and loan instalments.

Plan a career

If you are not working, get a job. If you think you need to dedicate too much time at home to go for a full-time career, try to get a part-time job or start working from home. This will not only help you earn a living, but also give you a sense of purpose and accomplishment. If you do not have the educational qualification to get a career of your choice, try to get yourself enrolled into distance learning programmes.

Contingency fund

Maintain a contingency fund equivalent to at least a year’s expenses to help you overcome short-term financial problems such as delayed receipt of income or loss of job. It will also provide a buffer for any family or medical emergencies. The money should be parked in a liquid fund or a fixed deposit with an overdraft facility for quick and easy accessibility.

Financial security

As a single parent, it is your duty to ensure that your children will be financially secure in case you die or become disabled. Get adequate life, accident and disability insurance for yourself and make them the beneficiaries. You should also take out a medical insurance cover for your family to tackle any major medical expenses. Take a family floater policy, which is cheaper than a standalone individual policy for each family member.

Plan your estate

It is imperative that you make a will, in which you appoint a guardian for your minor children. You should also appoint an executor, who will ensure that your assets are invested or used for proper upbringing of your children. He will also pass on the assets to your children once they attain adulthood.

(The writer is a certified financial planner and can be reached at rishi@touchstonewealth.com)