The cost of being a single mother.
Women headed more than 80% of the nearly 12 million single-parent households surveyed by the U.S.
Census Bureau in 2016. Single motherhood was once most prevalent among poor and minority women.
But today two-thirds of all single mothers are white, and one-third are black.
Facts about single mothers:
1. Demographics. Half of the nation’s single mothers never married, nearly one third are divorced, and less than one-quarter are separated or widowed. Half of all single mothers have one child, and 30% have two children.
2. Income. Women earn about $0.79 for every dollar their male counterparts make. The income gap is worse for African American and Hispanic women, who earn $0.64 and $0.56, respectively.4 The median household income for families led by a single mother was about $35,400 in 2016, well below the $85,300 median for married couples.
3. Motherhood penalty. Moms returning to the workforce may encounter a “motherhood penalty.” Dads often receive greater pay after having a child—dubbed the “fatherhood bonus.” Further, studies indicate that employers favor hiring women with no children, and that salary offers extended to mothers are lower, compared to other women.
4. Poverty. While the poverty rate among children living in a two-parent household was 12% in 2016, nearly 40% of children living with a single mother are considered poor. Children living in a household headed by a single Native American mother fared worse, at 43%. Among Hispanics, African Americans, whites, and Asians, the numbers were 41%, 39%, 30%, and 30%, respectively.
5. Child support. Only 40% of custodial parents report receiving the full child support payments awarded to them. Mothers averaged $5,181 in annual child support payments, while fathers averaged $6,562, according to 2013 data.
There is nothing more empowering than ensuring a bright financial future for you and your children. Take action:
1. Position yourself for personal and professional success. Build a small tribe of supporters that believes in you and wants you and your children to succeed. Share your short- and long-term vision. Ask for assistance, introductions, and advice. Learn to negotiate the chain of command at work. Find out when and how key decisions are made, and by whom. Get current salary data and other relevant statistics so you can make a facts-based presentation to your employer, if you are underpaid. If you have not earned the promotion you feel you deserve, take on “stretch assignments” to show your capability and impact.
2. Protect your income. Knowing your family’s basic needs will be met, despite the unexpected, is a must. One of the simplest and most prudent steps a mother can take to ensure her family’s financial stability is income protection. Life insurance and disability insurance* can help keep a family on track should something happen to its matriarch.
3. Utilize federal childcare accounts and credits. Childcare and education costs are a mother’s biggest expenses, after housing.2 Confirm eligibility and consider taking advantage of a Dependent Care Flexible Spending Account. This pretax benefit account can be used to cover preschool, summer day camp, before- or after-school programs, and other eligible expenses. Check eligibility for the federal Child and Dependent Care Tax Credit, as well.
4. Plan for your future. Beachfront retirement? Financial legacy for your children? Anything may be possible with proper planning. Assemble a team of financial, retirement, tax, and estate planning professionals to help you implement a financial strategy to help ensure you are prepared for the unexpected, and that your short- and long-term dreams are realized. Remember to update the beneficiary designations on all accounts and policies.
5. Prepare for college costs. Thirty years ago students at public, four-year institutions averaged $3,190 in annual tuition. Today they will pay $9,970 to send their children to their alma mater.3 Consider ways to prepare for college costs.
6. Give your children a financial head start. Permanent life insurance is a gift that lasts a lifetime provided premiums are paid when due. It provides death benefit protection and accumulates cash value annually. The cash value can be borrowed against for college expenses, a home purchase, entrepreneurial endeavors, or any other milestone in your child’s life. Policy loans accrue interest and reduce the death benefit and cash value. Life insurance premiums are lowest for young, healthy children. So consider a juvenile policy that can possibly be funded with gifts of cash from grandparents and other well-wishers.
Speak with a New York Life agent to prioritize your financial goals, and to implement a financial strategy. Click here to get started.
- U.S. Census Bureau, “America’s Families and Living Arrangements,” Table FG10, Family Groups, 2016.
- “Single Mother Statistics,” SingleMotherGuide.com, September 29, 2017.
- U.S. Census Bureau, “One-Parent Unmarried Family Groups with Own Children Under 18,” 2016.
- AAUW, “The Simple Truth About the Gender Pay Gap,” Spring 2017.
- National Women’s Law Center, “National Snapshot: Poverty Among Women and Families,” 2016.
- U.S. Census Bureau, “Table 8C—Poverty Status, Food Stamp Receipt, and Public Assistance for Children Under 18 Years by Selected Characteristics,” 2016.
- Congressional Research Service, “Child Support: An Overview of Census Bureau Data on Recipients,” March 1, 2016.
* Products available through one or more carriers not affiliated with New York Life Insurance Company, dependent on carrier authorization and product availability in your state or locality.
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