Raising a child by yourself can be incredibly challenging.

Parents talk of high aspirations for their kids, being locked out the housing market, and getting little support from their exes.

With solo parents there’s often a drive to give their children the same life they would have had if there had been two parents and two incomes.

That makes parenting expensive on one salary or a benefit.

We spend an average of NZ$265,680 per child from birth to age 18, according to Informed Investor research. One income often isn’t enough to cover those costs in an expensive country like New Zealand.

Here, single-parent households, of which there were 131,787 in 2018, are generally financially worse off than most other households.

In fact, 18 per cent of single parent households surveyed by Statistics NZ in 2020 said they didn’t have enough money to meet every day needs and a further 43 per cent said they had “just enough”.

When single parent households are struggling just to make ends meet, it’s also harder for them to buy a home and retire comfortably.

It’s especially hard in cities like Auckland, where the cost of living is through the roof and the average house price is now well over NZ$1 million.

Housing built for dual incomes

Housing in most major centres is unaffordable for single income households – especially single parents. Tom Hartmann, Personal Finance Lead at the Retirement Commission, says a change in demographics is partly to blame.

“House prices were able to keep extending, partly because of the increasing prevalence of dual-income households.

“That means those households getting by on a single income are getting left behind.”

In Auckland, where the average house price is over NZ$1.2 million and most buyers need at least a 20 per cent deposit, it’s easy to see why. Assuming they bought at the average price they’d need NZ$240,000 just to get a look-in.

The median income for a single parent with one child is NZ$43,000 – just under half the median of a couple with two kids, according to Stuff.co.nz’s number crunching.

Even if they could save half of their salary, single parents on the median income would need almost a decade to save that deposit.

Susan*, a single mother from the age of 19, raised two boys in Auckland and Hastings in the 70s and 80s, and saw this first-hand, even before prices skyrocketed.

“I was told by a real-estate agent that even back then I didn’t have enough money for a deposit for a house in Auckland, so I decided this money would have to go toward my kids’ education.”

Retirement postponed

Most single parents have made sacrifices like Susan’s.

And not only are they struggling to get onto the property ladder, due to having only a single income to support a household, many have to sacrifice a comfortable retirement as well.

Says Tom: “The amount of funds we can accumulate for retirement is predicated on the rate at which we save. Anything that negatively affects this is going to mean that we may have to sacrifice some of the things we want in retirement.”

Susan made one such sacrifice for her son’s education when he decided he wanted to study communications and marketing at AIT (now AUT).

“The upfront fees were $2,500. The only way I could get that sort of money was to resign from my job of six years so that I could get my pension pay-out, so he could pursue his dream.”

Susan’s now happily retired but had to move from Auckland to Hastings due to the high cost of rent in the City of Sails and lives off her fortnightly pension payment.

Rachael* is a single mum in Auckland whose nine-year-old son is an aspiring All Black playing above his age grade (and still dominating).

She says finding support was extremely difficult when her relationship broke down, and she started raising her son alone.

“Support from his dad fizzled out pretty quickly. Work and Income were also asking me how many jobs I’d applied for 12 weeks after my son was born.

“I ended up going back to fulltime work 11 months after he was born.”

Rachael now earns a good salary that puts her just outside of the range for assistance from Work and Income. Despite that, she says raising a son by herself in Auckland makes saving for the future near-impossible.

“We don’t live pay cheque to pay cheque, but I can’t afford to save because I need to give my son what he needs now.

“Realistically I’m never going to be able to buy a house or achieve many of those goals my partnered friends are.”

How to get ahead

It’s undoubtedly more challenging for single parents to make ends meet and save for the future, but there are small steps that can help, even when there isn’t much left of the pay cheque once all the bills have been paid.

This is where planning and prioritising come into play, says Hartmann.

Even without a high salary or much savings left after payday, consistency and staying focused can go a long way, he says.

With less income to work with, he says it’s essential for single income households to prioritise their goals and decide what’s important.

“It becomes about funnelling as much income as possible towards goals in the most efficient and effective ways.

“In terms of savings, it’s important to save a little, for a long time, consistently – and to match your investments to your goals.”

For instance, shares may be a better investment for financial goals that are more than a decade in the future, such as retirement.

More conservative investments may suit those with more urgent financial goals, such as buying a house.

“It’s also important to be resilient to unexpected costs. That means saving an emergency fund should always be the first step to protect your savings.”

There are more financial hurdles ahead of single parents than those in joint households, but how you manage your finances can help alleviate some of the stress.

And by managing your own money well, you can pass on the lessons of goal-setting and prioritising to your children, knowing that the next generation will be prepared to weather any financial storms.

* Names withheld for privacy