Take Charge of Your Money
Practical Tips for Moms & Everyone Else
90 percent of all women will have to manage their money on their own at some point in their lives. That is good news! And, what it means is that we women (and men, too) need to incorporate solid financial hands-on management into our skill set and not just turn it over to someone else.
Women set aside careers to raise families; we ratchet back to care for elderly or sick family members; women get divorced; and, many become widowed. It makes sense that we take responsibility for our financial health, along with taking care of all of the other important aspects of our lives.
I like the 4 common sense tips from Fidelity Viewpoints, and I would add one more: Start young.
Here we go...
1. Get involved in finances.
- Accounts—Know what accounts you & your spouse each have. Keep an up-to-date file with current hard copy statements for each account. Make sure that you know the account numbers. They'll be right there on the statements.
Your accounts include...
- Life insurance—Know if you or your spouse has life insurance & with whom. Is it job-related or independent? Keep a current file. How much coverage is there and what type of coverage is it? If you haven't named your spouse or someone else as a beneficiary, do it, NOW. It'll make it so much easier on the surviving family members.
- Homeowner's Insurance—Know who the homeowner's insurance group is & when your annual or semi-annual payments are due. Know how much the payments are & know if you are up-to-date on the payments.
- Auto Insurance—Know who your car insurance carrier is. When are the payments due & how much? What type of coverage do you have? Auto-pay or pay by mail?
- Medical Insurance—Know what kind of coverage you have. Know what your deductibles are for office visits, emergency room visits, catastrophic coverage, dental, eyes, etc. Keep a current file with hard copies of any claims & payments.
- Mortgage—Know what your monthly payments are & how much is left to pay off the loan. Know what your interest rate is. Look at both the escrow and the principal amounts. These figures are listed on your statements. Know how the payments are made, electronically (auto-pay) or by mail, and when they are due.
- Keep current hard copies of mortgage statements on file. This is especially important if you receive e-statements.
- Know where the deed to your house is kept. Any other deeds, make sure you know where those are, too.
- Loans—Keep current hard copy files for each loan. Know what the details are: interest rate; how much is due each month & when; how is it paid (electronically or by mail); what are the late fees; when will it be paid off?
- Cars & Vehicles—Know where the titles are. You need copies of current registration & vehicle insurance. This includes motorcycles, non street-legal dirt bikes, boats & RVs.
- Investments—Are there any stocks, 401(k)'s, IRAs, coin collections, or other investments? Where are these accounts located (e.g. shareholder's group, investment brokerage institution, credit union, safe deposit box, etc.)? Make sure that workplace retirement account information is accessible (online username & password) & keep hard copies of all statements. Make sure that you or your spouse are listed as beneficiary. Familiarize yourself with all of your combined investments & keep updated files for each. Stay on top of the statements, read them, and understand what you are reading.
- Income Taxes—Get in on paying your taxes, especially if you don't prepare your own & have an accountant do it for you. Study your tax return & know where it is filed.
- PASSWORDS—Keep a hard copy of all of the passwords in a locked safe box. Store the passwords in a secure file on your computer or in a password book.
- Get online & check every account to make sure that your have current passwords and access to all of the account information.
Filing does wonders and is a great way to educate yourself through organization. If you do nothing else, set up files for all of your accounts.
2. Save for retirement.
Set up a traditional &/or Roth IRA now.
If you don't work, but your spouse does, you can set up a spousal IRA. This type of IRA allows non wage-earning spouses to contribute up to $5,500 (for 2015) to their own Roth or traditional IRA, provided that the spouse is working and you file a joint federal income tax return. Working moms can build a substantial retirement portfolio by contributing to their own workplace 401(k) or other type of workplace retirement plan.
3. Look for growth potential from your investments.
Invest in the stock market.
Do your homework and invest a little in the stock market. Be prepared to follow your investment over time & know what the market is doing.
Fidelity has a lot of good information on this: 3 Reasons to Invest in Stocks
4. Protect your legacy.
Name your beneficiaries.
Make sure that the beneficiaries are named on all of your life insurance & investment accounts. This is very important because if you don't, there is no guarantee that the intended survivor will inherit the assets. Primary, secondary, and tertiary beneficiaries can be named.
Shore it up with a trust. Use a trust attorney to set up a legal trust so that your estate can be directed per your final wishes.
Be Smart & Take Charge of Your Future