Financial management for the broke(n) family
By Samuel Rosenberg From CARIBBEAN360
BRIDGETOWN, Barbados, Sunday August 2, 2015 – While not a foregone conclusion, children who grow up with a single parent are more likely to suffer financially than those who live with both parents which often means two incomes.
American studies during the 1960s also claimed that children from single-parent households were more likely to be poorer and more violent. Many critics reject such correlations, but 40 per cent of US households, where children under the age of 18 live with a single mother, see one primary source of income for the family. The Gingerbread organisation in the UK claims that 25 per cent of children live in a single-parent family home.
It would not be too far-fetched to suggest that a significantly higher number may live single-parent, single-income family lives within the Caribbean.
The financial implications are extremely serious. The cost of childcare can account for around 40 per cent of a person’s income and when there is only one stream of money, this leaves very little for housing, education, clothing and food, let alone a special treat from time to time.
But it doesn’t always mean that children brought up under these circumstances will live in dire straits when they get older. Many well-known people were raised only by their mothers, including US president Barack Obama, former president Bill Clinton, and actors Jamie Foxx and Tom Cruise, and they all did well for themselves.
Unfortunately, there are many absent fathers in the Caribbean who do not contribute a single cent to their children’s upbringing, and many families consider it a bonus when fathers are forced to pay up through the courts.
Reported figures across the world suggest that fewer than 40 per cent of single parents receive a full child support payment from the child’s other parent.
Many single mothers and fathers rely heavily on childcare, which is a consistent drain against their income. It is far easier for a couple to be able to afford childcare when each of those parents is working.
Single parents must consider their financial situation in even more detail, when they consider that illness or disability could prevent them from caring for their children themselves.
Single parents may be able to turn to other family members and friends to provide some financial assistance or occasional childcare, but it is essentially the responsibility of the parent to set and manage a budget to ensure that all of the critical obligations can be met each month. There would need to be a balanced strategy to manage the emotional and financial needs of both the parent and the extended family.
Samuel Rosenberg is the founder and CEO of Axcel Finance Ltd., the leading regional microfinance institution.
IMAGE: Businessman With Empty Wallet
