Going it alone: How single mums can plan finances

dubai - Do a clean-up of all the assets and cash you have - where are these assets based and what are you earning on them currently

You find yourself suddenly single - realising that while you were a couple, your idea of a financially secure future was looked after by the two of you. If you were both working, then you were probably looking at building a future together, including your retirement plan.

Life throws experiences at you that you do not expect and yes, these are times where you realise how important it is to be financially independent no matter what situation you are in.

Losing a partner through a divorce or death is one of the toughest experiences one can go through. The emotional stress is so intense that the addition of financial stress makes it look like the world has just ended.

But there is no need to panic. The first thing is to look into your emotional stability. Without a calm mind, it will be very hard for you to manage your finances and make rational decisions. There are many things to consider but take it step by step. You do not need to solve it all in one day - it can take you up to a year to get all your paperwork sorted but there are a few things to keep an eye out for that many of us completely forget.

First of all make a list.

Life insurance
Whether it is you or your partner who is financially providing for the kids, it is critical to have life insurance if ever something happens to either parent. We would emphasise that it is even more important in cases where one of the parent depends fully on the other for child allocation and education. What happens if the providing partner passes away? Many companies provide life insurance and it would normally be the partner as the beneficiary but if you have gone through a divorce, then you may not be the beneficiary anymore. So, it's a good idea to check and make sure one is in place to secure the kids' future.

Education trust fund
No matter what situation you were in, a separation or death of a partner causes financial strain. Education of the kids is probably at the top of your mind. Depending on who was the bread winner, you probably thought this was being taken care of. Now that you are on your own, look at both parents contributing to an education trust fund as early as possible and do it over a few years.

Holidays are tough
Probably the worst of it all - no more family holidays. Managing kids and logistics all on your own is daunting. Taking a plane, booking the car, figuring out hotels, etc., is not that fun all alone when you are used to doing it as a family. And it costs.

What's the solution? There is one for the short term until you pick up strength to move forward and face your new life. After all you have gone through, a vacation is what you need and it can be extremely helpful to build the trust and sense of security with the kids. Try a staycation. We do not do it enough but instead of logistics, car rental and flights, try out one of the hotels in Dubai itself. You will be amazed how there are some super offers available for one or two nights. Try getting one for free through any of the loyalty programmes from Skywards, Airmiles, etc. Watch out for MasterCard offers where hotel rooms are up to 40 per cent off.

Money does not grow on trees
The kids will continue to ask for what they want and if you're a single mum, the emotional aspect of saying no will become harder. As the kids lose the stability of having a complete family, you probably feel it is not the time to say no or bring in discipline. Be careful as this could be a slippery slope. It is important to stay consistent.

Those hidden costs
If you are getting a divorce and looking into allowance, make sure you consider all the costs that you will be bearing going forward, especially if you have custody of the kids. Make sure you take into once a year costs.

Maid visa, health insurance and flight cost
If you have kids, and are a single working parent, chances are that you have a maid. Check who is sponsoring the maid and as a single mum, you will need to take on the sponsorship of the maid and that comes with its own cost like the deposit, visa fees, medical tests, health insurance and the flight home.

Car insurance
Again, whose name is the car under? Remember that every year, there is the car insurance and registration fees to pay for. If your car is more than three years old, then you will need to pay for the road test.

House maintenance cost
If you live in a villa or an apartment, you probably have an annual maintenance contract. Potentially downsizing and cutting those costs could be a great way to start saving.

Your financial future
Now that you are on your own, your financial security has become even more important. Do a clean-up of all the assets and cash you have - where are these assets based and what are you earning on them. If you are a non-working mum and receiving allocation from your ex-partner every month, think about how you can save on the allocation and start building up some savings. Try that hobby you have always loved and turn it into a home business. Why not? If you are good at something, whether it is photography to selling arts and crafts - today with Shopify and other Internet shopfronts, you can be up and running in no time with minimum costs.

The writer is the founder and CEO of souqalmal.com. Views expressed are her own and do not reflect the newspaper's policy.

• UAE