Stay at home moms take on about a hundred roles every day. They are cooks, housekeepers, organizers, teachers, and are responsible for almost every other household job. Additionally, mothers who juggle between their day jobs and their duties as homemakers should invest more time to keep their financial matters more organized. For many, the answer to their financial troubles is debt consolidation.
In this article, we will discuss the top 10 financial mistakes young moms tend to make.
1. Failing to Build Their Own Credit
More often married women are found complaining that they do not have their own credit. This happens because most women depend on their husbands and partners to build credit for the whole family which is in fact a wrong practice. Every woman who has either a day job or is a homemaker should build her own credit so she has a safety cushion to fall back on during economic constraints.
2. No Short Term Planning
A lot of mothers do not plan for the short term, for example, it is really necessary to plan for Christmas, Halloween, birthdays, etc. in advance. Festive occasions call for lots of celebrations and expenses alike. This means moms should plan and save for such events long before such expenses become due.
Save a little each day so by the end of each month you will have a large sum of money to help you make special moments even more special.
3. Not Planning For Long Term
Long term expenses take into account of those matters that are expected to come up after several years or continue for a long period of time. Moms should always save money for retirement, college education of their children, contingencies, medical, and various other issues that come both expected and unexpected. Failing to do so can land you in great trouble.
4. Ignoring Retirement for Children’s College Savings
A lot of mothers are unable to save for both retirement and their children’s college fees. If you are doubtful, it would be better to choose retirement. Though it may sound a little selfish, it is a wiser option. Your children can secure educational loans once they grow up to enroll in college. Conversely, you will not be able to secure loans for retirement.
5. Not Learning About Finances
A lot of mothers are easy with their husbands being the number crunchers. Though, it is absolutely fine and wise to distribute tasks, it is good to stay involved and informed in all financial decisions. Also, moms should prepare their own mini budgets to see how well they can stick to their money management techniques.
6. Having No Safety Cushion to Fall Back On
Everyone should have a safety cushion to fall back on in case they need money in dire consequences. There have been instances where divorces and sudden deaths of the spouses have taken away support from moms even if they have a job.
When you and your husband are running the household through each other’s support, it is really necessary that both of you make decisions through mutual understanding and support.
7. Depending Too Much On Credit Cards
Swiping plastic cards is so simple; however, paying back for them is not. Credit cards are convenient to use when you need to spend money while you do not have the money. Using credit cards repetitively and being unable to pay outstanding debts can be extremely damaging for your financial well-being as well as your credit report.
For many, the answer to their financial troubles is debt consolidation. On an average, the standard credit card purchases are at least 112 percent more than cash purchases.
8. Not Managing Time Well
A lot of mothers face this problem. Even if you do not have day job, you can surely have your own time. You can still have a flexible and easy work schedule if you can manage all your day time tasks efficiently.
9. Not Availing Life Insurance Policies
Moms who stay back at home also need to have a life insurance policy. Providing full time care to your family means that you are an important part of your family and need utmost care as well. Discuss about your life insurance policy with your financial advisor soon.
10. Not Having a Primary Budget
Budgets are really necessary even if you have a flourishing career. It helps you determine your income earning potential and the amount of money that you should spend. Budgets help you increase savings for rainy days as well as for vacations.
Moms should work closely with their spouses to help them make better financial decisions and they should stay informed about their financial matters. Building their own credit and a safety cushion to fall back on will help them reestablish themselves in the face of financial disasters.
About the Author
AJ is a financial adviser and writes columns and blogs for various newspapers and websites. He loves, travelling, reading books and writing in his spare time. For many, the answer to their financial troubles is debt consolidation.