As we celebrate Mother’s Day, it’s important to recognize the unique challenges single moms often face, especially related to finances. With mothers leading approximately 80% of all single-parent homes with children under 18 at home, these women shoulder the burden of maintaining financial stability and security for themselves and their families. Here are five essential money tips for single moms to consider:

Secure Life Insurance

As a single parent and likely the sole provider for your children, you want your kids to have financial protection if something happens to you. Consider purchasing a term life insurance policy with a death benefit of 10 or 12 times your annual salary. This coverage can provide a financial safety net for your kids, covering expenses such as childcare, education, and daily living costs.

Establish an Estate Plan

An estate plan can bring much-needed peace of mind if you have minor children. Designate a guardian to care for your children in the event of your death, and appoint trusted individuals as powers of attorney for property and healthcare decisions. Creating a trust can also help you cover your children’s financial needs, with a trustee overseeing their inheritance until they reach adulthood.

Maximize Tax Benefits

Single-parent households are eligible for various tax credits and exemptions, so review your tax situation carefully. Consider the most tax-effective filing status, take advantage of child-related credits, and claim all available deductions for dependents and childcare expenses. Consider consulting with a tax professional who can help you maximize these benefits and optimize your tax strategy.

Prioritize Retirement Savings

While it’s natural to prioritize your children’s needs, don’t overlook your own financial future. As a single parent, consider prioritizing retirement savings to secure your own financial stability in the long term. Remember, no grants or scholarships exist for retirement, so paying yourself first can help you avoid becoming a burden to your children later in life.

Focus on Long-Term Financial Planning

Single moms are at a greater risk of poverty and financial instability due to being the sole earners in their households. While it’s important to address day-to-day expenses, don’t neglect the bigger-picture items like life insurance, estate planning, tax optimization, and retirement savings. These once-a-year tasks are vital for long-term financial success and security for you and your family.

Mother’s Day is not only a time to celebrate the incredible contributions of moms but also an opportunity to empower them with the knowledge and tools for financial security. By prioritizing life insurance, estate planning, tax optimization, retirement savings, and long-term financial planning, single moms can navigate the challenges of solo parenthood with confidence and resilience. Here’s to all the single moms out there—you are strong, capable, and deserving of financial stability and success. Happy Mother’s Day!

Author Elizabeth N. Muldowney Financial Advisor

Libby has been involved in the financial services industry since 2003. She earned a bachelor of arts degree in economics from Rockford University and is a graduate of the Leadership Rockford program through the Rockford Chamber of Commerce.

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