For many mothers, family comes first, especially before finances. But just as you take care of your children, you need to take care of yourself. And that applies to financial matters.
“Mothers are busy,” says Ann Dowd, CFP®, a vice president at Fidelity. “And they often don’t put themselves, let alone finances, first.”
But even for busy mothers, it makes sense to pay attention to your financial life. That’s because 90% of women will have to manage their finances on their own at some point.1 They may leave the workforce to care for a sick family member, become divorced, or find themselves widowed.
Here are four quick financial tips for mothers—and really just about anyone.
1. Get involved in finances.
Whether your spouse handles the majority of family finances, or you split the tasks, it’s a good idea to have a full picture of the family financial situation. At minimum, know what accounts you have and with whom. That includes bank and investing accounts, life insurance, mortgages, and loans. Make sure you know the account numbers and passwords, too.
2. Save for retirement.
Whether you are a stay-at-home or working mom, saving for retirement is important. If you don’t work, consider a spousal IRA. This type of IRA allows non-wage-earning spouses to contribute up to $5,500 for 2015 to their own Roth IRA or traditional IRA, provided the other spouse is working and the couple files a joint federal income tax return. If you are a working mom, contribute as much as you can to your 401(k) or other workplace retirement account.
3. Look for growth potential from your investments.
U.S. stocks have consistently earned more than bonds over the long term, despite ups and downs. Take a look at how $100 (see chart) would have grown over the history of the stock market (S&P began tracking performance in 1926). During this time period, stocks delivered more than a 10% average annual return, bonds 5.3%, and short-term investments 3.5%, before inflation.2 Of course, no investment just goes up and past performance is not a guarantee of future results. That's why it may make sense to find a mix of stocks, bonds, and short-term investments that match your risk tolerance and investment timeline, and growth potential to help you meet your goals.
4. Protect your legacy.
In order to ensure that what you've accumulated is distributed to the people and causes you care about most, it is important to name beneficiaries and create a will and health care proxy. Yes, it's an uncomfortable topic, but think of it this way: Do you really want someone else making these decisions for you?
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The views expressed here are that of myself or the cited individual or firm and do not constitute a recommendation, solicitation, or offer by myself, D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.
The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville. The Firm is also a member of the Financial Planning Association of Northeast Florida, the Jacksonville Chamber of Commerce, the Southside Businessmen's Club, and the Beaches Business Association.
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