State-owned Botswana Power Corporation (BPC) has awarded Norwegian company Scatec ASA SCATC.OL a contract to build a 50 megawatt (MW) solar plant, the companies announced on Wednesday.

Single parenting comes with many stresses, and financial stress is often one of them. In South Africa, single-income families are most likely headed by a single mom and surveys show most of them receive no financial contribution from the fathers of their children.

The only way to manage single parenting from a financial perspective is to plan – and for every eventuality: your sudden death, temporary or permanent disability, serious illness, medical expenses, emergencies, and retirement. 

Ideally, all these risks should be covered in a financial plan, crafted specifically for you by a qualified financial planner. A financial plan is based on your unique needs and goals. 

It should go without saying that you need to be budgeting like a machine. If you aren’t, get cracking because a budget is a plan for your income and expenses, and without one you have minimal control over your money. 

A will

If you own assets, like a home or an investment, you should have a will, but minor children provide the most compelling reason to ensure you have a will – and one that’s up to date.

If you die without a will, any assets you have – apart from savings in a retirement fund - will be dealt with in terms of the Intestate Succession Act and anything that your minor children inherit will go to the Guardian’s Fund until your children turn 18. 

The Guardian’s fund is administered by the Master of the High Court and does not provide for easy access to money, which can make it difficult for those caring for your children to get the money they need.

If you don’t have a will in which you nominate a guardian for your minor children, your children’s other parent will become their guardian. However, if the other parent is no longer alive, the state will appoint a guardian and your children may then end up being raised by someone you wouldn’t have chosen.

As minor children cannot possess property, assets or money, you would do best to set up a testamentary trust, to protect and use these assets for their benefit.

You can set up a testamentary trust after your death through your will. You must nominate the trustees of the trust including at least one trustee who is independent.

The trustees have a duty to manage the trust in the interests of the beneficiaries (your children) until your children can look after themselves and the trust terminates. You can stipulate the timing in your will. 

Income protection

Your ability to earn an income is your biggest asset and therefore needs to be protected. If you were to suffer a temporary or permanent disability tomorrow, what would become of you and your children?

Disability cover can pay you out a lump-sum benefit, or a monthly income protection benefit when you are unable to do your job and/or can no longer perform normal day-to-day functions such as bathing, feeding or dressing yourself.  

Seven out of every 10 South Africans will experience at least one injury or illness in their lifetime that will prevent them from earning an income, according to claims statistics from a leading life insurer.

The insurer says this means you are nine times more likely to experience a temporary disability than have your car stolen or hijacked in South Africa. You wouldn’t dream of not insuring your car, yet your ability to earn an income is worth a great deal more.

Life cover

Every parent wants the peace of mind knowing that if they were to die suddenly, provision has been made for their children’s living expenses and, ideally, education to tertiary level. A life insurance policy can do that. 

Although you should strive not to be underinsured, some cover is better than none. So even if you can’t afford to buy enough cover to provide for tertiary education, you need to at least provide cover for your children’s maintenance.

Try to avoid taking out life cover late in life when the risk of dying is higher – take it out as soon as you can afford to, ideally when you are in your 20s.

Medical cover

Belonging to a medical scheme has enormous benefits in a country that has a healthcare system that is oversubscribed. If all you can afford is an option which gives you access to private hospitals, even that may be better than being a patient of the state.

If you’re able to afford it, consider getting a gap cover policy to cover the shortfall when doctors and specialists charge above medical scheme rates. 

Insurance against severe illness is also useful for covering non-medical costs associated with serious illnesses such as cancer or a stroke. For example, you may need to pay for an au pair or live-in nanny while you undergo a cancer treatment.  Or you may need to buy a wig, which could set you back thousands of rands.  

Emergency fund

An emergency fund is a safety net that you should not be without.

The aim of an emergency fund is to ensure you do not need to take out credit and incur expensive interest and debt repayment costs when a crisis arises.

Your emergency savings must be easy to liquidate – in other words, not tied up in a term deposit account or subject to volatility as an investment in shares can be. You don’t want to draw out an investment when the markets are down. It doesn’t matter how little you have to save, the important thing is to make a start on building up emergency savings and to be diligent in squirreling money away. 

Retirement

Investing for retirement is critical so that you don’t end up dependant on your children or the state. If your employer does not provide an employer-sponsored retirement fund, a retirement annuity (RA) is a tax-efficient way to save for retirement. 

If you can afford to save for your children’s education, do it! But don’t do it at the expense of your retirement. You never know what your children will choose to do, but you do know for sure that ending up in retirement with no savings will not be fun.-fin24