Are you aware of the money mistakes you make? When you’re busy looking after kids, it can be hard to step back and look at the larger financial picture for your household. But you must know how to take care of your money, and this is especially important if you’re a stay-at-home mom who may not have a regular income of her own.
Today, we’re looking at the 5 biggest money mistakes that moms make. Think of this as the “what not to do” list so that you can start building a more secure future for yourself and your family.
Money Mistake #5: Relying on Credit Cards
Did you know that the average American family carries over $5000 in credit card debt? This is one of the worst forms of debt you can have because interest rates make it so expensive. That makes it harder to save money, which makes us more dependent on credit cards, and wham! We’re stuck in a vicious cycle.
Credit cards can be a great tool when they’re used wisely, but if you’re not careful, they can cause lasting damage to your financial security.
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These types of money mistakes can be easily cured. Make paying down your credit card debt a priority, and never charge more than you can pay off in a single month.
Money Mistake #4: Not having a cash emergency fund
Life is full of surprises, and having children only increases your odds of being surprised. Over 40% of American adults can’t put their hands on $400 to cover an unexpected expense, like a trip to the emergency room or a car repair. And God forbid your husband gets laid off from work or one of you gets sick or injured. Do you have enough to tide you over until you’re back on your feet?
Start your emergency fund by having a few dollars from each paycheck automatically deducted into a separate account.
Money Mistake #3: Not keeping your own bank and credit card accounts
Sharing accounts with your husband makes a lot of things easier, but it’s still a good idea for you to have your own savings account and your own credit card.
This will help you maintain your own credit history, which will be helpful if you and your husband want to apply for a mortgage or a car loan. And if you ever end up widowed or divorced, it will be vital.
All you need to do is open bank and credit card accounts in your name and use both regularly. Just be sure to pay off your credit card every month.
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Money Mistake #2: Spending money on your kids instead of investing for retirement.
I know. We want our kids to have every possible opportunity, from summer camp to college, but if you’re not saving for retirement, you may be doing your children, as well as yourself, a huge disservice. You don’t want to have to ask your kids to support you in your old age, do you?
By all means, save money for your kids to go to college, but not at the expense of funding your retirement. Your children can always take out loans for college or apply for scholarships. But there’s no financial aid for retirement. You deserve to spend your old age having fun with your grandkids, not stressing out about your bills.
So start investing for your retirement today. And guess what, oftentimes, those investments will grow enough to fund both your retirement AND your kids college expenses.
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Money Mistake #1: Letting your husband handle the finances
Chances are you know how much your last electric bill was, but do you know what your family’s net worth is, where your money is invested, or how to access all your accounts?
According to a recent study by UBS Global Wealth Management, 58% of married women leave the most crucial financial decisions up to their husbands, but there’s no reason to believe that men are better at managing money than women. In fact, studies suggest that women make smarter long-term investment decisions than men because they’re less likely to make risky choices.
Don’t leave it all up to your husband; that’s not fair to either of you. Be equal partners in your finances, and even take over the investments. You’d be surprised to see how well you can do.
Did you know…
Stress about money is the number one cause of divorce, and divorce increases the odds of women and their children living in poverty. Your husband may be earning more than you, but you still share the responsibility for looking after the finances and you have the natural ability to make even better investment decisions.
So, we’ve been talking about what not to do with your money. Now let’s start the conversation about what you should do. Make sure to click on this link to secure your spot for my free webinar, 3 Secrets to Make Your Money Work For You, where I’ll tell you how I started creating wealth for my family and how you can too.
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