Personal Finance Tips for Stay at Home Moms

With the recession many mothers have been forced or decided to stay home to reduce expenses and take care of their families. One thing that is crucial to the financial stability of stay at home moms is personal finance. Women can't depend on their spouses income during retirement.

As a stay at home mom you must have your own retirement account and finances to ensure you have a secure financial future. Here are some tips on how to prepare for your financial future.

Spending Plan
1. Create a spending plan and stick to it.

2. Collect change and put in a water bottle. Every 3 months take the money to the bank and deposit into a savings account.

3. Any additional money saved or earned (yard sale, coupons, etc.) can be deposited into a retirement account.

4. Sell new or used goods on eBay.

5. Save at least 3 to 6 months worth of expenses in an emergency fund.

Saving for Retirement
1. Consider getting a spousal IRA. A stay at home mom in 2010 can contribute up to $5,000 a year towards an IRA but this gets phased out for couples with adjusted gross income between $167,000 and $177,000.

2. Don't depend on your husband's retirement income to cover both of you during retirement. Each person needs at least 80% of their salary during retirement so if you are a stay at home mom, your husband's 80% salary will have to cover both of you and that money will be depleted very quickly even if you live a simple life.

Life Insurance
1. Determine how much money you would need to cover child care costs, housekeeping, car repairs, cooking, cleaning, school expenses for children, grocery shopping, etc.

2. Term life insurance is the cheapest type of insurance for a stay at home mom.

3. Determine how long you want a fixed rate: 10, 20 or 30 years.

4. Determine how long you want insurance: until your kids reach high school age, etc.

5. Comparison shop to find the best rates.

6. If you are unable to pay for a life insurance premium look for ways to reduce expenses and consider getting a part-time job.

Wills
1. Who will take care of my children?

2. How do I want my children taken care of?

3. Do I have any assets, if so, who will receive them?

4. Do I want my children to have an inheritance? If so, how do I want my children to spend their inheritance?