In the 1990s, a ‘single-income family’ in India typically meant a working father and a stay-at-home mum. It was in this environment that Sushmita Sen - all of 24 and about to embark on a glittering Bollywood career - adopted a baby girl. Not only was she the child’s primary caregiver, she was also the family’s single breadwinner. In fact, over a decade before Sen chose to walk that path, actress Neena Gupta singlehandedly raised her daughter Masaba in the 1980s.
Cut to 2022, and it isn’t uncommon now to see single-income or single-parent families with the mother being the primary breadwinner. A 2019-2020 report by UN Women stated that the number of ‘lone mothers’ in India is 13 million and growing, with roughly 4.5 per cent of households being run by them. In addition to this, 32 million single mothers live with their extended family. Despite changing mindsets and gradual societal acceptance of single-parent homes, it isn’t easy when the entire onus of running a household, raising a child and paying the bills is on one person’s shoulders. How then, can mothers cope with the demands of being in a single-income family?
Revathi Y, an IT executive and single parent to a young daughter, recalls leaving the country over a decade ago with $0 in her pocket. Since then, she has managed to successfully balance being the primary breadwinner and caregiver, although it has been a difficult journey, one that involved a lot of discipline. “As a rule of thumb, I always save 50 per cent of my salary and live on the other 50 per cent. I understand this may not always be possible for everyone - there were many times earlier on in my life where I could not afford to live on 50 per cent consecutively. However, I always saved. I started with 5-10-15 per cent and slowly increased until I could do without 50 per cent of my salary. A consequence of this decision meant my lifestyle did not change when I was able to save 5 per cent or 40 per cent, until I actually was able to put away 50 per cent. There is no magic number but I believe in 50 per cent because of a couple of reasons. If I am ever out of a job, I will have one whole year to find a new one because I am always living at 50 per cent of what I make. It also helps me know that the money I save during my working years will help me retire comfortably.”
Like everyone else out there, food, clothing and shelter are her first priority: a two-bedroom apartment in a decent, safe neighbourhood, clothes at a reasonable departmental store (no brand names) and good quality food (she doesn't skimp). The next non-negotiable is her daughter’s very expensive education, which she has been saving for since the day she was born. What is left after the above ‘needs’ are met, is where fancy clothes, travel, eating out and all the ‘wants’ come in.
Based on data collected from 89 countries, it is revealed that eight out of 10 single parent households worldwide are headed by women. This means that in 101.3 million families across the globe, women are the primary breadwinners and caretakers. How can these women safeguard their families, keeping in mind inflation and contingencies? Surajit Bose, a former banker with ICICI Mumbai, and now independent consultant, advices single-income mothers to invest in an appropriate life insurance and Mediclaim. “If you still have taxable income after the above, invest in other tax saving schemes to bring taxable income to zero or bare minimum. Structure your essential expenditure such as home, children’s education, household expenses, in such a way that it is 70 per cent of your post tax money. Keep 10 per cent in liquid funds for any urgent but small needs. If your age is less than 30, from the remaining 20 per cent, invest 70 per cent in equity and 30 per cent in debt or fixed income plans. if you are over 30 years, invest 50 per cent of the balance in equity and 50 per cent in debt or fixed income plans. Avoid taking personal loans or loans on credit cards. Also pay your bills on time as the failure to do so will lead to servicing high interest. Try and adhere to your monthly budget and remember to use your liquid fund money only for emergencies and not luxuries.”
But ‘all work and no play’ isn’t always the solution for some mothers, who want to balance financial prudence with experiences and quality time spent with children. Smylee Nallalagu, a marketing strategist and photographer says, “There’s enough awareness on being thrifty. But for a mum who works hard all day, comes home and deals with household chores as well, it is also important to take time off and create experiences with your child. You don’t need fancy outings. Even simple trips to the beach or the museum that don’t cost a lot, might be welcome. As for travel, focus on holidays that suit your budget. I always prioritise travel – to me, it is as important as savings or investing. We think so much about the future, that we forget to invest in the present. That isn’t to say that I’m careless. I do have money set aside for emergencies. I keep very little in my bank account, and whatever I save, goes into FDs which allow me a higher interest. The consequences of breaking an FD in the event of a contingency are also not very high. I would advice women to consider using Government banks, which often give you a higher rate of interest on deposits for women. If you have a girl child – like I do - there are also various schemes to consider investing in.”
While it is important to earn, it is equally important to save. With the help of a financial planner, Revathi Y invests the 50 per cent she saves for her retirement, a house she’s planning to buy and any medical expenses she may incur. Her advice to other single-income mothers out there:
1. You don't become financially secure by earning more. You do so by saving more.
2. You can't spend what you don't see. 50 per cent of my pay-check goes to a bank account that has no cheque book or a debit card, and I make sure it's a savings account so I don't take money out. Willpower is not bottomless. We need to keep temptation out of reach.
3. Write down your non-negotiables. Food clothing, shelter, my child's education and my financial independence post-retirement are my non-negotiables in that order. Only after money is put away for them every month, do I use it on my wants.
4. Review your financial worth at least twice a year to make sure you are still going along with your plan.
5. There is no shortcut to financial security and independence. The only way out is saving. There are many money management apps, but I still use pen and paper (okay, maybe excel!) even today.
If you want proof that single mothers get it right, look no further than success stories like Mariah Carey, Halle Berry, Christina Aguilera and even President Obama who famously said, “As the son of a single mom, who gave everything she had to raise me with the help of my grandparents, I turned out okay."