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6 Tips To Help Stay-At-Home Moms Create a Financial Plan

Being a stay-at-home mom doesn’t mean you need to put your financial goals on hold.

Photo by PNW Production

Becoming a stay-at-home mom is such a rewarding experience. The ability to stay home with your kids every day and be part of their lives in this way is invaluable. Oftentimes, though, stay-at-home moms put their financial goals aside since they no longer get a paycheck. 

While switching to a one-paycheck household may put a little bit of strain on your family’s finances, that doesn’t necessarily mean that you should put all of your financial goals on hold. That’s why stay-at-home moms should always have some type of financial plan in place so they can continue to work towards their financial goals, even if they no longer have a paycheck. 

What is a financial plan?

Your financial plan may look different as a stay-at-home mom, but you should still continue to work towards your financial goals

At some point in your life, you should sit down and devise a financial plan for yourself. In short, a financial plan is an outline of your short-term and long-term financial goals and a strategy you can follow to achieve those goals. While you may have one with your spouse, you should also consider creating a financial plan of your own as a stay-at-home mom. 

Normally when creating a financial plan, you consider your net worth and your cash flow to help you figure out a plan of action for achieving your goals. Many stay-at-home moms find it tricky to come up with a financial plan without a paycheck.

Just because you’ve made the decision to stay at home, that doesn’t mean you have to put your financial goals to the wayside. You may not bring in the same money you previously did while you were working, but you still have value! Your financial plan may look different as a stay-at-home mom, but it is still possible to work toward your financial goals. 

6 ways moms can prioritize their financial plans—even without making money

Photo by Vanessa Loring

With your financial goals in mind, it’s time to start thinking about how you can achieve them. It may require a bit of an adjustment, but stay-at-home moms can absolutely achieve their financial goals. 

1. Understand the value of your unpaid labor

Oftentimes as moms adjust to their new role as a stay-at-home mom, they struggle with the fact that they are no longer bringing in a paycheck. Just because they are no longer bringing in a paycheck, though, does not mean the work they are doing doesn’t have value. In fact, it’s quite the opposite. 

Being a stay-at-home mom is a full-time, around-the-clock job. It’s not a job where you can clock in and clock out. You’re handling childcare, cooking, cleaning, and everything else that your family needs. Plus, taking a break from your career is also an investment in your husband’s earning potential. 

You and your partner need to be on the same page about your value as a stay-at-home mom. You still deserve to put money away towards your own needs and financial goals, and spending money should come into play, too if it’s available to you both. Advocate for yourself if your partner doesn’t understand your value as a stay-at-home mom. 

2. Get on the same page with your partner about finances

Finances can be a tricky topic to discuss with your partner if you don’t establish healthy communication habits. 

Each family has their own unique approaches to handling and managing family money. You may handle the daily expenses, like paying bills, but your spouse may take charge of larger purchases. 

Or, maybe you’re charged with making all the financial decisions for your family. This may not be the best way to handle your finances, and your financial priorities may get lost along the way. 

Remember that you and your partner are a team here. You may not be bringing value in the form of a paycheck, but you are bringing value to your family through your efforts at home! You both need to be involved and on the same page about your finances. 

To establish healthy financial conversations with your partner, the two of you should set aside time regularly—like monthly or bi-weekly—to sit down and have an honest conversation about the status of your family’s finances. Give your partner notice about what you plan to talk about and ask them to do the same. 

Talk to your partner about your own financial goals, their financial goals, and the goals you may share as a couple, like retirement, saving for college, or whatever else may be important to you. Together, you should come to an understanding of which goals are the most important to the two of you and which goals may need to be put on pause for a little while. Then, the two of you can create a plan of action to help you achieve your goals. 

3. Create a household budget

A household budget is crucial to have when your family lives on two paychecks, and it’s even more important to have a household budget when you are a one-paycheck household. 

Take some time to sit down with your partner and list out all of your expenses—both fixed and variable. Think about those financial goals that are important to you, to your partner, and to both of you. Consider how those goals can fit into your budget and how you can prioritize your spending to support your goals. 

There are plenty of strategies you can use to manage your household spending, but a very common one is the 60% rule. Here’s how that breakdown looks:

  • 60% of your budget is devoted to your expenses, like your mortgage, utilities, and loans. 
  • 20% of your budget is devoted to your retirement savings and any long-term savings goals you and your partner have. This should be distributed to both your and your spouse’s savings goals. 
  • 10% of your budget should be devoted to your short-term savings goals, like your emergency fund or other savings accounts. 
  • 10% of your budget should be devoted to “fun” money. This should be distributed to both you and your spouse, too.

Your budget may look a bit different than this, but you and your spouse should use this as an opportunity to work towards your financial plan as well.

4. Get insured

Many stay-at-home moms do not think about life insurance for themselves. Most commonly, it’s only considered for their spouses. Realistically, though, you have to continue to think about the value of your “job” as a stay-at-home mom and what it means to your family. 

How would your spouse balance taking care of the kids and the house while also working full-time? Would your partner need to invest in a nanny to help take the kids to and from school and care for your kids after school? Would your partner need to pay someone to help with the cooking and cleaning responsibilities around the house? 

A life insurance policy for a stay-at-home mom can help you ensure the financial stability of your family if there were to ever come a time when you would no longer be around. Your family could use this policy to afford help for the kids as they adjust. 

Nowadays, life insurance policies are very reasonably priced, and you can get approved for a policy in only a matter of minutes. An accelerated policy is a type of no-medical-exam life insurance that doesn’t require you to take an in-person medical exam and even approves you for a policy almost instantly. All you have to do is fill out an application to tell the company more about your lifestyle, your medical history, and how much coverage you need. Then, the company analyzes your application. Almost always, you will know instantly how much coverage you are approved for and how much your premium will be. 

5. Continue to keep money in your name

Many couples opt to open up a joint bank account to make paying bills easier. Some couples choose to ditch their individual accounts while others choose to keep hold of those accounts for some individual financial freedom

Although you aren’t bringing in a paycheck anymore, stay-at-home moms should still keep their own bank and credit card accounts in their name. This is especially useful for spending your “fun” money. 

If you follow the 60% budgeting rule, put 5% of your family’s “fun” money into your account. This way, you still have some independence. Just remember to pay your credit cards off every month and to keep the minimum amount needed in your bank account to avoid any unwanted fees. 

6. Keep up with your retirement investments

Your retirement should not be put on pause. Though it may be a little more challenging to continually contribute to your retirement without a paycheck or an employer-sponsored plan, you can still make strides on your retirement plan.

If you have a 401(k) from when you worked, you should consider putting it into a rollover IRA. This way, you can keep that money devoted to your retirement and won’t be penalized for withdrawing money early. 

Now, as a stay-at-home mom, there are a few different ways to contribute to your retirement. While these are not your only options, these are among the most popular:

  • Utilize your spouse’s employer-sponsored retirement plan – Raise the contribution to your spouse’s retirement account under the assumption that these funds are to be used for the two of you. The risk here is that if you were to get a divorce, this account would not be in your name.  
  • Open a spousal IRA account – This type of account is for non-working or part-time working spouses who would not otherwise have access to contribute to qualified retirement accounts. You have the option between a traditional and Roth account.

No matter which route you choose, make sure that you continue to contribute to your retirement. 

Being a stay-at-home parent is nothing short of a rewarding experience—even if you don’t necessarily get paid for it. Remember, though, the work you are doing absolutely has value and your financial goals shouldn’t be put aside. Make your financial goals a priority and work with your partner to ensure that you can make those financial goals a reality.

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