Managing money and the needs of a family can be a real challenge. Unfortunately, for many households, especially those led by single mothers, it is often one of the top stressors.
Debra Lopez-Spence, vice-president, sales and service, insurance and wealth management at Scotiabank, and Yendi Phillips, media personality during a recent ScotiaLIVE online session, shared that planning is the most important step for these parents to realise their financial goals.
“Start with a plan and stick to it. Determine your goals and objectives for the future and write them down. You absolutely must start saving early, and if you haven’t, start now. The planning and tracking of both the sources of money and the spending of money involves budgeting, saving and investing,” Lopez-Spence said.
“The first 10 per cent of an individual’s monthly income should be directed toward achieving your goals. “If you can’t do 10 per cent, start with 5 per cent, just start. The key is discipline and consistency,” Lopez-Spence advises as a rule of thumb. She further stressed that for women who are the breadwinners in their family, having life insurance is an important part of financial planning as it assures an avenue for income replacement in the event that you are unable to work due to a major illness and financial security for dependents in the event of one’s untimely passing.
“You have to be proactive and have a disciplined approach to how you manage your money. Not just with periodic or regular financial planning, but also so that you can be reactive to specific events. All large sums started from small amounts, and so the choices you make today can change the course of your future,” she also added.
For Phillips, being disciplined also allows you to enjoy what you have. “Building a culture of being disciplined with money is important. You can’t treat money with frivolity, but you must enjoy the fruits of your labour in a managed way,” she noted.
Phillips highlighted that parents must factor in ways to restore themselves, ensuring that they also make themselves happy. “Balance is not just about looking at the dollar and cents; it is also the well-being of both you and your children that the dollar and cents support,” she said.
She advised that mothers should try to live within their means and understand their monthly cash flows, which is the key to financial planning.
Lopez-Spence, a senior banker, reinforced that for parents, it is important to leave the next generation a little better than the last. “We are hopeful, and we want more for our children. Leaving a legacy is not only a transition of your assets, but also your knowledge and your philosophies to the next generation. These would include instilling discipline, a healthy relationship with money, and a strong work ethic, so that they too can steward those assets to the next generation,” she said.
Lopez –Spence shared that for the average woman, “there are many things to save for – emergencies, children’s education, a home and of course retirement.” She recommends consulting with a licensed investment advisor who can help guide the process.