5 Savvy Financial Tips For Moms
Updated: Feb 9
When it comes to money, there are gender-specific risks that women face. Statistics from the U.S. Census Bureau research indicate that women earn about 80 cents on the dollar compared to men. Aside from this, the difference in the lifetime earnings gap between men and women is clear and more predominant with women who put a hold on their careers to cater for their children. For this reason, women must be financially savvy and make smart money decisions. Here are some financial tips to help you out.
When you speak to financial advisors about emergency reserves, you will realize that the necessary amount should cover at least three to six months of expenses. They also advise that this amount should be kept in a different account that is easily accessible. Imagine you got laid off due to Covid-19; having an emergency reserve will come in handy and lessen the effects of being laid off.
Insurance is a significant financial decision to make and life and disability insurance are two plans to consider. This will ensure that in the unfortunate event of death or an accident that limits your ability to work, you can have something that you and your family can depend on.
Most modern families have an unspoken arrangement when it comes to money. You will usually find one spouse who handles the home's daily expenditure, pays bills, manages schedules, and balances the books. The other spouse's role may cover overseeing household assets, investments, family accounts, and retirement accounts. In such a setting, both parties should understand the family's financial standing, agree on a common financial goal, and manage your finances. For example, saving for college or moving to a smaller home when the children are mature. There should also be a common consensus on how to spend and pay off debts.
If you are a stay at home mom, this allows you to look around the house and notice how to cut expenses and invest wisely. This financial acumen is just something that comes naturally to most moms. As such, you should take the liberty to learn how to save, invest, and practice it. You can start by creating your savings and investment accounts to get a feel of the investing atmosphere. Read up on forex trading, spousal IRA, and other investment options that will provide avenues to profit. There are many materials on investing, from books, to podcasts, to articles that will significantly improve your financial IQ and investment insight.
If you are a stay at home mom that had to choose between family and career, it does not limit your employable skills. You still may be at the peak earning years of your career, and you should seriously consider getting a part-time job or one that allows you to work remotely. Through such means, you could secure contracts or consulting jobs that will keep your skills sharp and increase your chances of getting back onto the workforce full-time if you want to.
Engaging in part-time work could also bring in some money that will be a welcome addition to the family's finances. It would be best if you ever considered using your time at home to continue your education online, study some courses, and learn new skills.
Insurance is a significant financial decision to make and life, disability and homeowners insurance are three plans to consider. This will ensure that in the unfortunate event of death or an accident that limits your ability to work, you can have something that you and your family can depend on. Homeowners insurance adds extra protection and peace of mind when it comes to protecting your home and belongings in the event of floods, fire etc. Just make sure to check each policy's pricing factors so that you can get the best cover for your home.