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Tue, 21 Aug 2001 02:08:47 -0700
YOUR INCOME MAY BE CUT IN HALF, BUT NOT YOUR EXPENSES BY PAMELA YIP Dallas Morning News When you think about what a family does to plan its financial future, what often comes to mind is a mom and dad caring for their children. But increasingly, families are headed by a single parent, and for him or her, the steps to ensure a secure future must be taken with the grim reality that there isn't a back-up partner should things go awry. ``The normal rules and advice that apply to married couples don't apply for single parents,'' said Deirdre Weaver, author of ``Loosely-Braided Fog: A 3-D Single Mom In The Making'' and a speaker for the American Association for Single People in Glendale. That doesn't mean that single parents and coupled parents don't have the same financial concerns. It's just that for single moms and dads, the pressure to get it right is more intense because they're it. ``If you don't plan, it doesn't get done because there is no other parent out there doing it,'' said Joan Gruber, a certified financial planner at Joan M. Gruber Advisors in Dallas. That's how Aurora Lacsamana of Richardson, Texas, has had to approach life. She's been a widow for six years. ``Even though I had some life-insurance money, I continued spending as if I still had the spouse and, at some point, I realized I should stop doing that because there wasn't another source (of money) from spousal income,'' said Lacsamana, 56, a computer analyst at J.C. Penney and mother of four kids. ``There was no extra income to depend on when the bills came.'' Lacsamana is among a growing population group. More than 20 million children, or more than 27 percent of young people, now live in a single-parent household. Experts say single parents need to realize that just because their income is cut in half doesn't mean their expenses will be as well. ``You're not going to (own) a house worth half as much,'' Gruber said. ``All the expense of children is not going to go away just because the husband or wife isn't there anymore.'' In fact, a single-parent family with a child last year can expect to spend a total of about $164,090 through age 17 for housing, food, transportation, clothing, health care, child care and education, and miscellaneous expenses, according to a report from the U.S. Department of Agriculture. Those numbers apply to single-parent families with pretax incomes of less than $38,000 a year. And most single-parent households fall in that category. ``As single-parent families have one less potential earner, their total household income is lower and child-rearing expenses consume a greater percentage of income,'' said Mark Lino, an Agriculture Department economist. This doesn't mean that single parents can't make a life for themselves and their children. They just have to be vigilant about their money. ``I don't think people realize what financial dire straits a single parent can be in,'' said Weaver, 43, who's divorced and the mother of a 15-year-old son. ``The rest of the world doesn't understand that vacations don't happen. I buy a CD for myself once a year.'' Lacsamana had to take out a home-equity loan to pay bills three years after her husband died. She cut back on vacations, movies and concerts. Her 16-year-old son, Arneil, still lives at home, but her other children, ages 29, 28 and 26, are on their own. Lacsamana is using mutual funds to save for her son's college education. Saving is one thing that single parents need to keep doing, no matter how little they put away. ``Because of the enormous expenses of supporting a family, they forget about their retirement,'' said Jude Barcenas, Lacsamana's certified financial planner. Open a savings account or money-market mutual fund and contribute as much as you can afford consistently each month. Designate this fund as an emergency fund. In addition, single parents should be frank with the children about the family's finances. ``I've heard single mothers struggling with finances saying, `The kids have to have the Nikes, the designer jeans,' '' said Carol Ann Wilson, founder of the Institute for Certified Divorce Planners in Boulder, Colo. ``If the mother would tell the kids how much money they have and that she can't afford what they want, they're going to help Mom, they're going to help money stretch.'' © 2001 The Mercury News *********************************************************************** To receive list commands mailto:[EMAIL PROTECTED] and in the body of the message type help fathersworld. To unsubscribe send your mailto:[EMAIL PROTECTED] and in the body of the message type unsubscribe fathersworld. Please Help Us In Continuing to Help Others Support Father's World a 501(C)3 corporation buy a T-Shirt http://www.fathersworld.com/tshirt.html it can be deducted as a charitable donation and help educate fathers on being a better parent. Donate to Father's World Online http://www.justgive.org/Merchant2/merchant.mv?Screen=PROD&Store_Code=J&Product_Code=FaWoInGdSt0#top