Being a stay-at-home mom is an incredibly challenging, yet fulfilling, job. You are the CEO, accountant, cook, and chief problem solver all rolled into one. And while we may not be receiving a salary for our hard work, that doesn’t mean we shouldn’t have a financial plan in place.
It is easy to get caught up in the day-to-day busyness of managing a household and not reflect on or make decisions for the long term. It’s easy to neglect our own financial well-being, especially when we are not bringing in a regular income. But having a financial plan is crucial for both yourself and your family’s future.
What Personal Financial Planning Entails
Budget
First and foremost, it’s important to have a budget in place. Since you are likely doing the vast majority of the day-to-day buying for this house, this is one financial item you can have a lot of control over. Budgeting helps you keep track of your monthly expenses and make sure you’re not overspending.
Looking at the money in minus the money out over the past three months can give you insight into where your household stands currently.
Hopefully, the household is not spending more than what is being brought in. If so, evaluate your expenses and see what could be eliminated so you’re not operating at a deficit going forward. It’s easy to justify unnecessary purchases when we don’t have a strict budget, but those small expenditures can add up quickly. By creating a budget, you can prioritize your spending and allocate funds towards important things like emergency savings and retirement.
Safety Net
Speaking of emergency savings, it’s essential for stay-at-home moms to have a safety net in place. As much as we try to plan and budget, unexpected expenses can arise. Whether it’s a major car repair or a medical emergency, having an emergency fund can help ease the financial burden.
Aim to save at least three to six months’ worth of expenses in your emergency fund. Start with three; once you achieve that, you can redirect that habitual saving elsewhere. But the goal should be six months because your household is on one income.
Life Insurance
Another important aspect of financial planning for stay-at-home moms is life insurance. Life insurance can provide a safety net for our loved ones in case of any unforeseen circumstances.
While we may not be the primary breadwinners, our contribution to the household should not be overlooked. If something were to happen to us, it’s essential that our families are financially secure.
Think about all the things we do as moms. If we weren’t here, those things would likely need to be outsourced and outsourcing is expensive. A mistake families make is insuring the income, leaving stay-at-home moms underinsured. Instead, think about quantifying and then insuring what the person does for the household.
Retirement Account
Investing in your retirement may not be at the forefront of your mind as a stay-at-home mom, but it’s crucial to plan for your future. It may sound silly to plan for your retirement as a SAHM, but you will eventually get older, your spouse will retire and your household is going to need money saved for the both of you to live off of.
Even though you do not have earned income, you can still contribute to your retirement through a Spousal IRA ( Individual Retirement Account). With a Spousal IRA, a little bit can add up, starting early and being consistent with your contributions can make a significant impact in the long run.
Personal Financial Goals
Let’s also not forget about our own personal financial goals. Whether it’s going back to school, starting a side hustle, or saving up for a dream vacation, it’s important to have a plan in place to achieve these goals.
Setting aside a small amount each month towards our personal goals is not only financially responsible, but it also promotes self-care and helps maintain a sense of independence.
Professional Help for Financial Planning
Lastly, don’t be afraid to seek professional help when it comes to financial planning. There are plenty of resources available for stay-at-home moms, whether it’s online budgeting tools or financial professionals who specialize in working with households on one income.
Remember, having a financial plan in place is not just about the numbers; it’s about securing a brighter future for ourselves and our families.
Being a stay-at-home mom is a valuable and often underestimated role. It’s easy to get lost in the daily chaos of motherhood, but taking the time to establish a financial plan is crucial for our well-being and that of our families.
By creating a budget, having an emergency fund, investing in insurance and retirement, and setting personal financial goals, we can ensure a more secure and stable future for ourselves and our loved ones. So let’s take charge of our finances and embrace the power of financial planning!
