Single mothers find innovative ways to manage finances and prepare for retirement amid rising costs
For many single women, especially those with children, saving money often seems impossible.
Rising rent costs, unprecedented food prices, and the expenses of supporting kids take precedence overpaying down debt or saving for retirement. Resources on maximizing income in these situations are limited, according to a special report by The Globe and Mail.
“We’re treading water, and we try to live as simply as possible,” says Jennifer Robinson, a 52-year-old single mother of three in Etobicoke, Ontario. “I’ve gotten rid of my car to save money. We buy as much as we can on sale. The only plan we have is not to live beyond our means.”
Single women, as sole earners, must approach financial management strategically to get ahead. However, a Bank of Montreal 2023 report found that 73 percent of women surveyed did not have a written financial plan.
Women who have an evolving financial strategy and advisory support often find themselves ahead in building wealth.
“Whether by decision, design, or default, if women are single, they’ve got to take financial planning much more seriously because there isn’t anyone else to lean on,” says certified financial planner Léony deGraaf Hastings.
She adds that single parents have limited time, and simplifying financial management increases the likelihood of sticking to the plan. Automation is one strategy, allowing for bi-weekly or monthly deposits to RRSP, TFSA, and RESP accounts.
Another wealth-building strategy involves understanding how to maximize earnings so that no potential income is missed. A lack of education about available resources often hampers this effort.
“A lot of times pension plans are ignored, or people aren’t clear on their options, so they just leave the defaults in place,” says deGraaf Hastings. She notes that employer matching programs are often underutilized.
Robinson, who worked at a university for 16 years before taking a leave due to health issues, recalls that despite earning enough for her family, she lacked the information needed to prepare for serious illness.
“I had three young kids, and I was a full-time prof, so you’re scrambling, and it’s hard to get a signal through that noise,” she says.
Francesca Tarantino, a private investment portfolio manager with Scotia Wealth Management, emphasizes revisiting financial plans near any major life event. “Stages of life are a big deal,” she says.
“In your prime earning years, women should claim all tax deductions like childcare and medical expenses, and transfer tuition tax credits.”
Divorce, often a mid-life event, can be financially devastating and may be the first time some women focus on finances. Tarantino advises that any inheritance received during mid-life should be deposited in an individual account to avoid division during a marriage dissolution.
She recommends updating financial plans every three to five years and suggests that women support each other through mentorship and community connections.
Robinson turns to her sister for financial guidance. DeGraaf Hastings notes that elderly women increasingly rely on each other to stay financially afloat, sometimes even cohabiting to reduce living expenses through groups like Senior Women Living Together.
When it comes to investing, both advisors suggest that women avoid overly conservative investments. “Single women should be aware that the risk of running out of money in retirement is real if their investments don’t keep ahead of inflation,” says deGraaf Hastings.
Tarantino agrees, noting that women tend to prefer secure investments like GICs, which are taxed higher than dividend income or capital gains. She advises finding an advisor one feels comfortable with to discuss financial concerns and receive appropriate advice.
