single person, the tax is due nine months after death.” Women need to ensure that their estate is not eaten away by taxes and administrative costs, and they should also identify a guardian for their child.
Addressing these issues might be challenging for single mothers, who may have limited resources to provide for themselves and their children. But Williams’ advice is simple: “It’s not the amount of money you earn, it’s what you do with it that matters.”
WHAT YOU SHOULD KNOW
1. Single moms should make savings a high priority. Since there is only one income, you should immediately begin saving for emergencies. The funds should be kept in a savings account or money market account, where the money can earn interest but is still accessible.
2. Preparing for the “what ifs” is critical for a single mother because she has a dependent to care for. Adequate disability and life insurance create a foundation necessary for single parents.
3. You should concentrate on saving for retirement first. Put money into a 401(k) or an IRA since this saving is for the long term. The sooner you begin, the faster you’ll start benefiting from the magic of compounding interest.
4. Experts also suggest investing in large, mature companies that are still growing. Begin investing for children by placing at least $200 per month into college savings plans. Also, set up the account so relatives can contribute here in lieu of giving birthday and holiday gifts.