NEW YORK — It’s no secret that childcare is expensive. In fact, the average single parent says they’d need a minimum of $332,705 in savings in order to feel at ease about raising their child. That’s according to a survey of 2,000 single parents, split evenly between moms and dads. Results also show the average respondent thinks about their child’s financial future five times every day.
Four in 10 single parents (43%) admit they hadn’t started planning for their child’s financial future until early childhood (between the ages of four to six) or later. In fact, 7 percent still have yet to begin financial planning for their kids. Only 10 percent started planning before their child was born.
Additionally, the study, “Single Parents and the Financial Future,” reveals that single dads are more confident about securing their child’s financial future than single moms (69% vs. 58%). Conducted by OnePoll on behalf of Life Happens, a nonprofit educating consumers about the importance of life insurance, results also found 75 percent felt overwhelmed when becoming a single parent.
Seven in 10 (69%) said becoming a parent is a significant financial burden, one that was likely exacerbated when they became the sole provider.
How single parents are working to save for their children’s future
On average, single parents spend $14,150 a year on childcare alone. The top costs they felt unprepared to deal with on their own included groceries (56%), healthcare (49%), bills (49%), and creating and maintaining a savings account (48%).
Four in 10 (42%) have gone into debt for their children and 52% have made adjustments to their career or work choices to support their financial situation. That includes seeking salary increases (53%), switching to a job with a better work-life balance (53%), and negotiating for flexible work hours (51%).
Some single parents have also picked up an additional job (48%), started a side business or freelancing to supplement income (42%), and even downsized to a more affordable living situation (25%).
“Parenthood brings many new expenses, including some unexpected ones, but it can be especially challenging for single-parent households,” says a financial advisor and chair of Life Happens Barb Pietrangelo, in a statement. “As your child’s main source of emotional and financial support, it’s important to plan ahead to ensure they’re financially secure in the event you are unable to be there for them.”
To manage their financial responsibilities, parents who are sole providers set aside a specific amount of money each month (57%), purchase life insurance policies to provide financial security for their child (52%), and invest in education savings plans (43%).
If they were to pass away unexpectedly, single parents would rely on their savings (59%), and immediate or extended family (57%) to help support their child.
“A life insurance policy can help provide for your child’s future in many ways, from food, clothing and shelter to their education,” adds Pietrangelo. “The younger and healthier you are, the more affordable life insurance can be, so exploring your options as early as possible is highly encouraged.”
Survey methodology:
This random double-opt-in survey of single parents (1,000 moms and 1,000 dads) was commissioned by Life Happens between July 27 and July 31, 2023. It was conducted by market research company OnePoll, whose team members are members of the Market Research Society and have corporate membership to the American Association for Public Opinion Research (AAPOR) and the European Society for Opinion and Marketing Research (ESOMAR).