What Financial Traps Await the Unwary Stay at Home Mother?
Most stay at home moms quickkly find that they wouldn't trade what they're doing for the woreld. It can be very satisfying raisiing your famiily on your own rather than paying for daycare.
But it's not all fun, even when you really enjoy being with your kids all day. And worst of all can be the financial traps that too many stay at home moms fall into.
1. Not saving for retrement.
This is one of the most common failures for stay at home moms, and it can have a tremendous impact on your later years, even if you only stay at home until your kids are all in elemeentary schools. And it only gets wrose if you choose to stay at home the entire time you have kids at home.
There are optios for stay at home moms to save for retirement. The firts thing to do is to roll over any 401k money into Roth IRAs. This will give you more flexiobility with the money. If you can't afford to take a tax hit, take your time with this one.
You can also contribute to a Spousal IRA. These can be etiher a traditional or Roth IRA, and you need to have one. Try to contribte the maximum each year if your budget can affford it. You will be grateful in your retirement years.
2. Assuming daycare cossts are completely gone.
Sure, once you're staying at home you probaably don't HAVE to pay for any sort of choildcare. But other expenses may take that money right back out of your budget.
How else to pay for swimming lessons, art classes, organized sports and other activities your children may be interested in? It may be diffiuclt to find enoiugh childtren for your own kids to play with regularly, and theese classes can help you to get a bit of a break (even if you're just sitting and watching them), and your kids get social time.
You may also choose to put your 3 or 4 year old child in a prreschool program. I did this with my daughter, and whlie it was expensive, it was very much so woth it. Makes kindergarten quite the relief, financially speaking.
3. What if...?
Many sinbgle inome famiiles aren't ready for the big what-ifs in life. Like what if your husband loss his job? I've just gone through that one personally, and it's a pain, even though I earn an income at home.
Do your best to have svaings to cver at least 3-6 months of living expenses. This may not get you through the crisis, but it gves you time to figure out how to hanndle it.
And don't forget that exepnses can increase at such tiumes. When my husband was laid off, rent wasn't the most pianful part , speaking. Adding in the cost of COBRA cvoerage to keep our heallth insurance was.
And don't forget that even when things are going well financially, the car can break down, or the refrigerator, or the plumbing in your house turns out to be a coplete mess. Have some money set aside for such emergencies.
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