Becoming a parent is one of the hardest, most rewarding jobs a person could have.
However, when it comes to your finances, the little people who make us parents can make planning a bit more difficult.
While both mothers and fathers can play a significant role in both parenting and determining a family's financial future, in honor of Mother's Day, today we're going to focus on some financial planning tips for moms.
Tip No. 1: Be Aware of Your Financial Situation
Statistically, moms are likely to live longer than dads.
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According to Social Security Administration, the average lifespan of women in the U.S. is 87, which is three years longer that of men. So while it's not guaranteed, it is possible that mothers will one day be managing the family finances alone.
In today's day and age, women are often just as involved as men in the family finances, but it's important that women especially know where their investments are, who is handling them and what their estate plan looks like.
Tip No. 2: Emergency Funds are Especially Important for Single Moms
While we recommend everyone have an emergency fund ready for financial rainy days, these are especially important for single parents. Whether it's an issue in your home, a medical emergency for your child or a sudden job loss, having a backup plan could help you sleep better at night knowing that you can provide for your family if an issue arises.
We usually recommend that couples set aside about six months' worth of living expenses in a safe, liquid account. Because single parents don't have a spouse to lean on to help cover the bills in case of an emergency, we tell our single mother clients that they should consider putting away up to nine months of living expenses for a safer cushion should disaster strike.
Tip No. 3: Moms More Likely to End Up in a 'Sandwich,' So Plan Ahead
Once a mom, always a mom.
When it comes to our children, we always want to be there to help and down the road, you may find that a child needs help financially with paying for college, getting married or dealing with divorce. It's hard to watch our children suffer and not be able to help. If you want to be able to help your child out financially, it's important to talk to your adviser about how you can build that into your financial plan.
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On top of that, mothers are also often are tasked with taking care of our own mothers when they reach old age. According to the American Psychological Association, women are more likely than men to become caretakers for elderly and disabled family members. So it's often that mothers end up being the ones to care for their own aging mothers.
Talk to your own parents about their plans for health care and finances later in life. The sooner you know if they're expecting you to help financially, the sooner you can start saving and planning with them to help ease the financial burden. If you feel like you need a helping hand in organizing your financial life, reach out to your financial adviser to help you feel confident in your family's future.
