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SAHM Money Matters Comments

  • By Erica Sandberg
  • March 03, 2010


dw_mom Erica Sandberg is a credit expert and columnist for Creditcards.com. She is also the author of "Expecting Money: The Essential Financial Plan for New and Growing Families."

All moms are working moms. Though you may not be bringing home a paycheck, it’s still up to YOU to protect your financial security.

Remember: About half of all marriages end in divorce—and divorce is the number one cause of women ending up in poverty. Protect yourself by avoiding these common mistakes:

Bad move: Shorting your retirement funds. By suspending contributions to a company-sponsored retirement plan, even for a few years, your funds could dip—perilously. Worse, your social security benefits may also decrease, since your payout is contingent on your working years.

Smart move: Open an IRA. Whether a spousal, traditional or Roth IRA is right for you depends on many factors, but socking away cash for when you've stepped out of the workforce is essential. You probably aren't covered by your spouse's plan. Choose a retirement account, then resume contributions.

Bad move: You're still in dual-income mode. Though your household wages may be halved, your housing and other costs are probably the same—and you may be spending as if you still had two paychecks.

Smart move: Create an updated budget. Tally your current expenses (include savings) and subtract from your total income. Pare down spending until you come out even. Don’t do this alone, by the way—this is a couples task.

Bad move: Forgoing financial control. When some women stop bringing in the cash, they forfeit their rights as economic equals in the household. Worse, they imagine their husbands are taking care of things.

Smart move: Keep abreast of money matters. Gain access to all banking and investment accounts, including passwords and usernames. Discuss your budget and goals with your spouse. At least annually, review both your credit report and his. If something terrible was to happen to your spouse—today—you should feel confident that you could manage on your own.

If you're a stay-at-home mom, let us know how you stay in control of your financial life.

Erica Sandberg is a credit expert and columnist for Creditcards.com. She is also the author of "Expecting Money: The Essential Financial Plan for New and Growing Families."

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