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The goal for many parents is to give their children a better life than they had. You want to know that your kids will be successful and happy even after you’re gone. One big way to do that is by passing on your wealth.
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Generational wealth is building lasting or legacy wealth that can be passed down from generation to generation, says Ksenia Yudina, a CFA and founder and CEO of UNest, an app that helps parents invest for their children’s future. “It’s extremely important because it can help close the wealth gap for the next generation,” she said. “By providing your children with a financial head start, you are setting them up for future success.”
But if you’re a single parent — particularly a single mother — that can be much tougher to do. In fact, single moms are one of the most disadvantaged groups in the country, with nearly 30% of their families living under the poverty line, according to the U.S Census.
Yudina noted that with a single-income household, it is more difficult to break the cycle of poverty. “Marriage comes with advantages including dual earners, tax breaks and the ability to split expenses,” she said. “Single moms are at a major disadvantage from the outset due to the gender pay gap and the fact that they don’t have a partner to help with finances or childcare.”
These challenges can definitely feel overwhelming. The good news is you can overcome them with some planning.
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Ways Single Mothers Can Build Generational Wealth
There’s no getting around it: Women have to work harder than men to generate the same level of wealth as men. Not only are women paid less, but they’re often penalized for leaving the workforce to shoulder caregiving responsibilities. And due to a longer average lifespan, their earnings need to stretch further.
So as a single mother, your focus needs to be on earning extra income and investing your money in tax-advantaged accounts. Here are a few ideas for what to do.
Take on a Flexible Side Hustle
Getting a second job with a rigid schedule doesn’t work for single moms who have to be around for their kids after school, according to money-saving expert Andrea Woroch. “However, there are plenty of flexible side hustles that you can work as little or as much as you can when you’re free or even …….