Check out the 5 financial tips for the 3rd week of February 2012

Tip no 1 - When you're a single parent, make sure you have adequate insurance coverage.

It is crucial to have adequate insurance when you're a single parent. Buy adequate amount of life insurance coverage to secure the financial future of your children. Calculate your income, assets, debts and age of your children before buying life insurance. It is best to purchase coverage amount at least 6-8 times your yearly income. You can buy term life insurance or cash value life insurance as per your financial condition. You can go for the latter if you wish to save for the education of your children. Time life insurance is good choice when you're interested in replenishing lost income.

Tip no 2 - Have enough coverage in your auto insurance to provide necessary compensation in case of a mishap.

Mishaps can happen at any moment or place. A major accident can create severe damage to your car and financial health. If you don't have sufficient auto insurance coverage, then you'll have to repair your favorite car out of your own pocket. Keep in mind that the cost of replacing a car can be huge, which can drain your funds completely. Contact your insurance agent as he can tell you how much coverage you need to buy for you car. The agent can tell how much auto insurance coverage is enough to meet your individual needs and the state laws.

Tip no 3 - Make payments in cash while purchasing a foreclosed house.

It is best to make payments in cash while purchasing a foreclosed home. This helps to complete the process smoothly and quickly. It will only take a few days to close the deal. The agent is less likely to make any delay when he receives the payments in cash. On the other hand, if you wait for the mortgage lender, then it may take as much as 60 days to complete the buying process. The agent may get a better offer from someone else. In such a situation, he may refuse to sell the house to you.

Tip no 4 - Check your credit reports at least 4 times a year. It helps in maintaining good credit rating.

Pull your credit reports and check the status of your credit accounts at least 4 times in a year. This will help you know about the accounts on which you have defaulted. You can know about errors on your credit reports and take steps to rectify them. For example, if you find that a wrong credit item has been reported on your credit report, then you can contact the credit bureaus and get it corrected. This will help you maintain good credit rating. Moreover, you can know if there are any threats of identity-theft. If you find that your name is miss-spelt, then it might be the case that an identity thief has tried to open account in your name.

Tip no 5 - Be up front with your children regarding your financial situation when you're a single parent.

You have lots of responsibilities when you're a single parent. You have to look after the professional and domestic life single handedly. You have to look after your child, impress your boss and take care of the house alone. Most importantly, you need to meet all the expenses within a limited income. In such a situation, it is better to show the correct picture of your financial health to your children. This will make them understand why their mother is not able to buy designer clothes or the latest video games. Your children will understand your position and help you as and when required.