Doing It All on Your Own
Raising children alone puts you on a financial tightrope without a safety net.
By Jane Bennett Clark, Senior Associate Editor
From Kiplinger's Personal Finance magazine, April 2006
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Seeing your teenager pull out of the driveway for the first time might make you shudder. But it seemed like a miracle to Katherine Engel. A single parent since 2003, the 43-year-old Tucson, Ariz., woman spent several hectic years playing chauffeur to daughters Anya, now 17, and Anastasia, 15. After Anya scored her license last fall, Engel scraped together the money to buy a second car, a 2000 Saturn. "Now the girls go everywhere, and I don't have to worry about their schedules," she says.
Like the 13 million other parents who raise kids on their own, Engel wouldn't mind a few more miracles like this -- say, limitless time and energy and the ability to do ten things at once. "Single parents work, come home, supervise homework, try to get the house together and are back at it the next day," says Kathleen Soucy, of Parents Without Partners. "They spend weekends shopping and running errands. There's a lot of stress."
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Add money to the list of worries. Single women, by far the majority of single-parent households, earn an average of $26,500 a year. Child support, for the 45% of custodial parents who receive the full amount, averages about $5,800 a year. Raising a family on such modest means can feel like teetering over a precipice, says Jeffrey Mehler, a financial planner in Centerbrook, Conn. Even solo parents who are more affluent sometimes feel their situation is precarious. "There's this fear because the first level of safety -- the other parent -- isn't there," says Mehler.
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Engel, a native Russian, has more reason than most to feel as if she's on her own. Her first husband, the girls' father, remains in Russia. She met her second husband in Tucson while participating in a teaching exchange program. When that marriage foundered about three years ago, she agreed to move out with the children.
Finding an affordable place for a family of three wasn't easy. Although Engel receives neither child support nor alimony, she did get a $30,000 divorce settlement. When she discovered a new housing development with homes advertised for $140,000, she used her settlement as a down payment and grabbed one. Now, she says, she is "ecstatic" to be settled in the modest, three-bedroom home, which borders a sidewalk punctuated by mesquite saplings. Engel has planted two more trees in her backyard in anticipation of hanging a hammock someday.
Engel had one advantage over many solo moms: She and the kids had no special attachment to her husband's house. Many single parents, especially women, try to keep the family home for the children's sake, says Soucy, even if that means stretching to make the mortgage or signing away their share of a pension. Better to downsize than to jeopardize your future, she says. "Keeping the house isn't the be-all and the end-all."
Another solution to the housing dilemma can be to find a roommate. When Marian Morley of Olney, Md., divorced in 1982, she and her young daughter moved in with a friend who was also a single mother. "We knew each other from day care," she says. "The kids got along great. It was the best living arrangement I ever had." The deal was so successful that it self-destructed: Within a year, Morley had saved enough money to buy her own house.