If you’re a mother who needs a few ideas about how to build financial stability, the best time to start is now. The best place to begin is wherever you currently are in the process of creating economic security for your family. For so many women, that means exploring all the options that come with life insurance coverage. Other possibilities include starting investment accounts with an online brokerage firm, establishing emergency funds to cover unexpected events, saving for a down payment on a first home, and dedicating a portion of each month’s income to a retirement account like an IRA. Here are some of the pertinent details about how to get started on the road to financial security.
For many reasons, parents neglect to purchase the right amount of life insurance based on their income, needs, and long-term financial plans. The first step is to find out what your options are. Most working or stay-at-home moms discover that it’s helpful to work with online options where they can view all the highest rated providers and search for the most suitable rates, terms, and other features of various policies. It’s important to gather as much information as you can during the initial stage of policy selection. That’s why there are so many advantages to using a one stop shop kind of marketplace to see lots of relevant information at the same time.
You don’t need to be wealthy to open an investment account. Nowadays, in the era of digital everything, people can set up and fund a simple brokerage account in about 30 minutes. Decide what kinds of assets you want to invest in, and don’t forget to begin slowly. Spend time on a simulator and work with a demo account to gain the basic trading skills you’ll need to select worthwhile securities. Note that it makes sense to create an emergency fund before setting up an investment account.
If you’re lucky enough to have an employer-sponsored retirement account, you’re already ahead of the game. But for the many single and married mothers who don’t have an account set up yet, now is the time to act. There are two general options, and they each have their pros and cons. One is the Roth version, which allows investors to deposit after-tax earnings that are not taxed at the time of post-retirement withdrawal. The traditional IRA uses pre-tax income but does sustain a tax hit when you take the money out.
In the current volatile economy, there’s never been a more appropriate time to establish an emergency fund. Regardless of your income level, consider aiming for a total of about three months of income in the fund. That way, if you lose your job or are laid off, there’s be enough cash to provide for basic needs for at least 90 days. Some people build larger funds and invest the money in a bank CD or a conservative stock fund. In tough economic times or during family crises, a one-year emergency fund can be a true lifesaver.