Young Widow Wants Answers

Hi Scott,

I am a recently widowed 33-year-old mum of a one-year-old, and I am feeling the pressure of managing my finances. My situation: I have $350,000 in savings but I owe my in-laws $170,000. I have no other debt -- I own the house ($600,000), and some friends have set up an education fund for my child. My Centrelink single parenting payment application was rejected due to my having assets over $200,000. I plan to go back to work half time next year (earning $30-40,000) but I also want to focus on being a mum. Please help!

Nicole

Hi Nicole,

I’m sorry for your loss.

If I were in your situation, I’d do the following:

First, pay back your in-laws the $170,000. That way you don’t owe anyone anything, and you’re back on your own two feet.

Second, I’d put $10,000 in an online saver account (what I call ‘Mojo money’) so you don’t have daily money stresses.

Third, I’d make a $10,000 contribution to your super to kick it along.

Fourth, I’d invest the rest in an investment bond (in shares) for 10 years.

If you do this -- and you’re conservative with the value you ascribe to your car and other possessions (mark them down as gumtree value) -- you will get the full parenting payment (single) and the maximum family tax benefit A and B until your child turns eight.

Financially, you’ll likely be in a better position staying at home than you will working and paying childcare. In the long term you should work regardless (it’s good for your self-confidence), but right now you should take the opportunity to focus on the most important person in your life.

Scott