Motherhood can be fulfilling. But despite that fulfillment, it can also add more financial responsibility since there are little ones to support financially. Given the lifetime earnings gap common among women who set aside their careers to care for their children, they’re more likely to struggle with how to master money management.
For instance, an article published by CNBC mentioned that according to the U.S. Census Bureau Research, women are only paid 83 cents as income for every dollar that men receive. Moreover, approximately 42% of working women deal with gender discrimination, earning less money, and being unqualified for promotions. All these things can lead to working moms consistently earning less than men.
Hence, with many responsibilities on their plate, including dealing with low income and taking care of the family’s overall dynamics, working moms can quickly lose track of their personal finances over time. Because of this, they should have a solid financial plan to deal with their finances more efficiently.
But how are they going to do that? Read on to learn the four personal finance tips for working moms.
- Set a budget
Working mothers need to set a monthly budget. With it in place, they can monitor their spending habits, cut down their expenses, and pay their bills on time. They can also make sound financial decisions and achieve short-term and long-term financial goals.
Budgeting can help working moms deal with personal finances more effectively. A budget lets you figure out where your money goes and how to control it. To set a budget, you need to collect all the essential financial statements, compute your income, and come up with a list of monthly expenses.
However, making a budget can be complicated and confusing unless you’re an expert in money management. Fortunately, there are budgeting apps that can ease the task. These technological advancements are designed to streamline the budgeting process by tracking cash flow and setting financial goals.
With the apps’ automation and interactivity features, working moms can stay on top of their budget and overall personal finances. Hence, if they want to simplify the budgeting process, they can check out some websites online for more information about the best apps to choose from.
- Come up with a debt payoff plan
Dealing with many debts can be financially draining for working mothers and their families. Financial problems can wreak havoc on their families if they don’t know how to pay the debts off—because of this, developing a debt payoff plan can be an effective way to handle their personal finances. It can help working moms get rid of debts and have a more stable financial situation.
Thus, they need to have a debt list to create a debt payoff plan. Here they can determine what debt to pay off first and know how much can they pay for it. Working moms can settle their monetary obligations as quickly as possible by doing all these things. They can build their wealth to improve their personal finances when this happens.
- Make some investments
Working mothers always look to safeguard the families they love and care about. However, this emotional protection may not be enough to secure their families’ financial future. This is where investing enters the picture.
Essentially, an investment can be defined as a tool used to allocate funds to generate more revenue. Hence, with some investments in place, working moms will have an opportunity to create income and wealth for their families. When this happens, they can rest knowing they have enough financial resources to cover their family’s needs.
Hence, to get started with investing, working moms should choose the right types of investments. These include life and health insurance, savings in the bank, and retirement accounts. For example, an employer-provided 401k retirement plan can be an excellent option to invest money since they’re working.
- Have an emergency fund
Emergencies may happen anytime, so working moms should prepare for them financially. This is where an emergency fund comes into play. When working mothers have an emergency fund, they can have enough money to finance an unexpected expense. This can help them manage their personal finances better.
Hence, working moms need to consider some important factors to establish an emergency fund. For example, an article published by Consumer Finance mentioned that they could save money for emergencies by setting a financial goal and making consistent monetary contributions. By doing all these things, they can have the funds they need to protect their families from unexpected financial situations.
Conclusion
Dealing with money matters can be a challenging undertaking for working moms. With many things to consider, it’s easy to become financially disorganized. Fortunately, personal finance management doesn’t have to be difficult if they follow the tips mentioned above. The more working moms know how to manage their personal finances, the more they can enjoy motherhood.