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Money talk crucial for single parents, kids

The "Singaporean of the Day" series tells the stories of ordinary Singaporeans with extraordinary experiences. Here, meet Wayne Toh, a single father who struggles to look after his four children after his wife walked out on the family three years ago. For more, visit http://singaporeanoftheday.com.

Stephanie Holmes-Winton remembers the time when she ran out of money during her first year of university. The Dartmouth, N.S., financial adviser called her mom -- a single parent -- in tears, distraught because she couldn’t buy groceries. Her mother told her she’d send a package right away to help her.

“I thought I was going to get an envelope,” Holmes-Winton says, explaining that she was expecting a cheque. “Instead, it was a rather large box. Inside was a thing of toilet paper, a loaf of bread, a jar of peanut butter and a note. The note said, ‘I love you too much to teach you when money runs out there’s more where that came from.’

“To this day, I still remember going through the process in my own head, thinking ‘I really need to understand this,’” says Homes-Winton, president and CEO of the Money Finder. “She could have sent me 20 bucks, but I never would have learned that lesson ... Because there was just one income, I understood it [money] better. It was better managed.”

It’s tough enough for two-income families to make ends meet these days. But the financial challenge associated with raising kids as a single mom or dad is even more daunting.

Holmes-Winton, a mom herself and the author of $pent: Your Money-Mindset is the Key to Your Financial Freedom, says it’s important for all parents to have honest conversations with their children about money — and that those discussions are even more crucial for single parents.

“A lot of single parents end up feeling guilty,” Holmes-Winton says. “Unless someone who’s raising one or more children by themselves is receiving substantial support from the other spouse, it’s really difficult to make one income do more than it’s capable of mathematically.

“All parents, but single parents in particular, need to talk about how much the house costs and how much money is left over at the end of the month,” she says. “My mom ended up having to confide in me; she couldn’t hide things from me.”

Those frank conversations gave Holmes-Winton a real-life education in how finances function.

Of course, single parents should be looking into tax credits, benefits, and deductions to help make ends meet. And then there’s the perfect-world scenario of putting money into RESPs, RRSPs, and even an emergency fund.

But to really keep finances on track, Holmes-Winton encourages single parents (just like those in two-income households) to “take a serious look at their costs on a monthly basis”.

That means tracking spending and distinguishing between “needs” and “wants”. Maybe these processes will lead to decisions such as ditching the land line in favour of a cellphone only, giving up some TV channels, buying clothes second-hand rather than brand new, rarely eating out, or perhaps all of the above.

“What things are they unable to control truly?” Holmes-Winton asks. “People will say, ‘I can’t control my regular bills.’ Well maybe you could but just don’t want to. The biggest risk in spending is not necessarily rent or utilities, because those are unemotional. Rather it’s groceries, clothing, eating out, coffee, movies — those things that give you a sense of relief from the pressures of being a single parent, even for a few minutes.”

A simple but effective way of keeping spending in check, she says, is to use cash instead of credit.

“Sometimes you’d be really surprised at how much happier you are by spending a little bit less,” Holmes-Winton says. “Using cash is really helpful. It also happens to be a great exercise for children to see.”

Another word of advice? Keep in mind that things can change for the better.

“You cannot be afraid of what the possibilities are for advancing yourself,” Holmes-Winton says. “Sometimes as a single parent it’s very difficult to see that whatever your role is now, whatever your income is now, it’s always going to be that way because there’s so much pressure. You just can’t see how you’re ever going to have better job or a better income.

“But you can’t assume you can’t do what you haven’t tried to do.”