Tips for Single Mothers to Financially Secure Their Future

Being a single mother comes with unique challenges, especially when managing finances and securing a stable future for yourself and your children. Balancing the responsibilities of parenthood with financial stability can be scary, but it is certainly achievable with careful planning and smart strategies. Whether you're navigating the complexities of budgeting, saving for emergencies, or seeking ways to increase your income, the right approach can pave the way to financial security.

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Disclaimer: #The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CAGR 8%; ₹50,45,591 @ CAGR 4%. *Tax benefits and savings are subject to changes in tax laws. All plans listed here are of insurance companies’ funds.

Tips to Secure the Future for Women

Track Income and Expenses

The first step is to understand your current financial situation. Track your income – salary, freelancing projects, government benefits (if applicable) – for a month. Then, list down all your expenses – rent, groceries, transportation, utilities, child-related costs, etc. Categorize your expenses as essential (housing, food), entertainment, dining out, and debt repayments. This will help you identify areas where you can save or cut back.
Create a Budget and Stick to It

A budget is your roadmap to financial security. Allocate your income towards essential expenses, debt repayments, a small emergency fund, and most importantly, savings and investments. Use the 50/30/20 rule: 50% for needs, 30% for wants, and 20% for savings and investments. A tool called SIP Calculator can also help you calculate returns on your investments (if any).
Invest in Yourself

Investing in yourself is not selfish; it's important for your family's well-being. Consider upskilling or taking additional courses to increase your earning potential. Explore flexible work options like part-time jobs, work-from-home opportunities, or freelancing to manage your time better.
Build an Emergency Fund

Create an emergency fund to cover unexpected expenses like medical bills, job loss, etc. Aim to save 3-6 months' worth of living expenses. Look for high-interest savings accounts or liquid funds for easy access.
Protect Yourself and Your Child with Insurance

Insurance is a safety net. Child Plan provides financial security for your child if something happens to you. Health insurance safeguards you and your child from hefty medical bills. Explore government schemes like ULIP Child Plans. ULIPs for Retirement, Pension Plans, or government schemes like Sukanya Samriddhi Yojana and Atal Pension Yojana. You can also consider starting a SIP to secure your financial future.
Seek Financial Guidance:

Financial planning can be complex. Consider seeking professional guidance from a registered investment advisor like Policybazaar, who can help you create a personalized financial plan based on your goals and risk tolerance.
Build a Support System:

Financial security is not just about money. Having a support system can make a big difference. Connect with other single mothers, friends, or family members who can offer emotional and practical support.
Educate Yourself:

Educate yourself about financial products, investment options, and government schemes. There are numerous resources available online and through financial literacy programs offered by various platforms.

Best Investment Options for Women

With a diverse range of best investment options for women, choosing the right ones depends on your risk appetite, investment goals, and financial situation. Here are some of the best investment options in India that you can consider:

Low-Risk Options:

Below is the list of top low-risk investment options in India:
- Fixed Deposits (FDs): A safe and secure option offered by banks and post offices. FDs offer guaranteed returns with minimal risk, making them ideal for short-term goals or building an emergency fund.
- Public Provident Fund (PPF): Backed by the government, PPF offers attractive interest rates and tax benefits. It has a long lock-in period (15 years), making it suitable for long-term goals like retirement.
- Sukanya Samriddhi Yojana (SSY): A government scheme specifically for girl children. It offers high interest rates and tax benefits, encouraging long-term savings for a daughter's education or marriage.
- National Savings Certificate (NSC): Another government-backed option, NSCs offer fixed interest rates and come with a fixed maturity period. They are a good choice for those seeking guaranteed returns with moderate liquidity.
Moderate-Risk Options:

Below is the list of top moderate risk investment options in India:
- Unit Linked Insurance Plans (ULIPs): Combine insurance coverage with investment in equity or debt funds. While offering life cover, a portion of your premium goes towards investment, generating higher returns compared to traditional insurance plans.
- Pension Plans: Investing in a pension plan helps you accumulate a corpus for retirement. There are various options available, including employer-sponsored plans, National Pension System (NPS), and private pension plans. NPS offers tax benefits but has restrictions on withdrawal.
- Gold: Indians have a long-standing relationship with gold. It is considered a hedge against inflation and can be a good diversifier in your portfolio. You can invest in physical gold, gold exchange-traded funds (ETFs), or Sovereign Gold Bonds (SGBs) issued by the government.
Higher-Risk Options:

Below is the list of top high risk investment options in India:
- Equity Shares: Direct stock market investments offer the potential for high returns, but also carry significant risk. This option requires in-depth research and a higher risk tolerance.
- Mutual Funds: A diversified basket of stocks and bonds managed by professionals. Mutual funds offer the potential for higher returns but with some level of risk. Choose an investment plan aligned with your risk tolerance and investment horizon (short-term, medium-term, or long-term).

Conclusion

Building a secure future as a single mother in India requires discipline, planning, and smart financial decisions. By taking these steps and being proactive about your finances, you can empower yourself and create a brighter future for you and your child.

FAQs

How to become financially stable as a single mother?
- Create a Budget: Track your income and expenses to understand where your money goes and identify areas where you can cut back.
- Build an Emergency Fund: Aim to save three to six months' worth of expenses in an easily accessible account for emergencies.
- Reduce Debt: Prioritize paying off high-interest debts and avoid taking on new debt.
- Seek Financial Assistance: Look into government programs, grants, and local charities that provide financial support for single mothers.
- Increase Income: Consider additional job opportunities, freelance work, or further education to enhance your earning potential.
- Plan for Retirement: Even if it's challenging, contribute to a retirement plan to ensure long-term financial security.
How to plan the future as a single mother?
- Set Goals: Define short-term and long-term financial and personal goals for you and your children.
- Education and Career Advancement: Invest in your education and skills to improve job prospects and earning potential.
- Estate Planning: Create a will and designate guardians for your children to ensure they are taken care of.
- Build a Support Network: Surround yourself with a reliable network of friends, family, and community resources for emotional and practical support.
- Teach Financial Literacy: Educate your children about money management to prepare them for financial independence.
How can a single mom make money?
- Freelancing: Offer services like writing, graphic design, or virtual assistance on freelance platforms.
- Part-Time Jobs: Look for part-time or flexible jobs that can fit around your parenting schedule.
- Online Business: Start an online business, such as selling handmade goods, dropshipping, or affiliate marketing.
- Tutoring: Provide tutoring services in subjects you are knowledgeable about, either in person or online.
- Childcare Services: Offer babysitting or daycare services to other parents in your community.

†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is based on past 10 years’ fund performance (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in

Past 10 Years' annualised returns as on 01-01-2025

^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.

Tax benefit is subject to changes in tax laws. Standard T&C Apply
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^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

#The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CARG 8%; ₹50,45,591 @ CAGR 4%

¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.

**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).