There are few experiences in life that are as traumatic as losing a spouse. When life is upended through a divorce or the passing of your partner, it can be highly emotional—and it also presents serious financial challenges.
Seeking financial help for single parents is a first step in this new phase of life. As you navigate an unfamiliar landscape, start by addressing the practical details of your new financial situation in order to carry on and provide for your children. There’s no set checklist for what to do when you become a single parent, but New York Life is a reliable resource for help with the financial solutions you may need. Here are some of the steps that can help guide you through this transition.
- Revise your estate-planning documents
It’s essential that you update your will and other estate-planning documents to reflect the change in your family’s situation and you should consult with a lawyer to assist you. Update the beneficiaries on your IRA, 401(k), and insurance policies. Update any powers of attorney or health directives. You may also want to update your children’s guardian appointments.
- Purchase life insurance or update your existing coverage
As a single parent, you need to protect your children. Assess your life insurance coverage with a financial professional and make sure you have enough coverage to provide adequately for your children should something happen to you. The goal is to personalize your insurance coverage to best suit your family’s goals including college and retirement.
- Review all your financial documents
To give yourself a clear picture of your entire financial situation, inventory all your bills, bank statements, investments, loans, and other documents that help you understand your family’s assets and liabilities. Assess your retirement accounts. If you were not previously managing the family finances, you will have to step into this role. Get help if you need it from a financial professional or another trusted advisor.
- Create a new budget
Once you’ve analyzed how much money you have coming in and going out, it’s time to draw up your new budget. This should include building up an emergency fund if you don’t already have one. Emergency savings are even more important when you don’t have a partner on whom you can potentially rely on. If you and your partner have separated, that means you’re also separating your finances. Managing finances after divorce is often complicated, so they will have to be determined legally and then worked into your new budget.
If possible, don’t make any major financial decisions right away, like selling your house or choosing what to do with a life insurance benefit. Take some time to adjust to your new role as a single parent. You may find, as the months go by, that your financial priorities shift.
- Take care of yourself and your family
Every new decision you make as a single parent should be to care for your family and yourself and provide a stable life for your kids. Being a single parent requires love and fortitude, so remind yourself that you’re undergoing one of life’s great trials. And with the right knowledge and guidance, you can come through it in good shape.
You can start exploring the life insurance* options including features, costs, eligibility, renewability, limitations and exclusions that the AIA Trust offers you as an AIA member through New York Life Insurance Company and Hagan Insurance Group, the Plan Administrator for the AIA Trust.
Learn more or call Hagan Insurance Group at (877) 801 3727
* Underwritten by New York Life Insurance Company, 51 Madison Avenue, New York, NY 10010 on group Policy Form GMR. NYL-1882423
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