Women face a lot of discrimination when it comes to money when compared to their male counterparts. According to the US Census Bureau research, women earn only 80 cents for every dollar that a man earns. There is also the fact that women have to step away from work for a number of years to take care of children or others which creates a significant gap in lifetime earnings.
Usually, it is fine when the primary earner uses his income to support the household. But then life can happen, wreaking havoc on that rock-solid foundation plan that you had set up. Things that can derail your life to this extent include divorce, death, unemployment, and disability. Here are some tips for moms to help get their finances back in order.
1. Emergency Reserves:
It is highly recommended to have a savings account that has enough money to cover 5-6 months of expenses. This is highly beneficial for households that rely a lot on the primary earner and in the unfortunate case of them getting unemployed, there is a safety net to fall back on and weather the period of uncertainty. These savings can prevent having to scramble to find money and avoid drastically cutting down expenses.
Make sure that the primary earner of the household has all of the necessary insurance in place should something happen. It is after all the only source of income that the household relies on getting by.
3. Family Finances:
In a household, both spouses need to know what is happening in terms of money. From the perspective of the household, they need to know what is owned and what is owed. It is a great idea to split the responsibilities between you and your spouse. One can be responsible for handling the bills and managing the chequebook while the other can handle the responsibilities of savings and investments. But make sure you have regular conversations about your finances so that both of you are on the same page.
4. Investment Acumen:
Investing a great skill to have no matter your background. If you are a stay-at-home parent who relies on someone else for support, consider building experience through investment. There are plenty of resources out there from books, podcasts, and resources to help you increase your knowledge on the subject. Make sure to monitor your credit history just in case of any discrepancies. If you are forced to support yourself in the future, you will be ahead of everyone.
5. Earning Potential:
Women who leave the workforce during the peak of their careers for children or family. It can extremely difficult for them to re-enter the workforce. You should consider trying out part-time or consulting work so that you are still earning something and you are keeping your skills sharp. Furthering your education is also a great choice and can be extremely rewarding. If you ever find yourself in a situation where you are solely responsible for the financing of the household, you will have the confidence to make the most of the potential opportunities.