7 Financial Steps Every Working Mom Needs to Know

Being a working mom means you have two full-time jobs – your family and your career. The last thing you want to deal with are your finances. As if you don't have enough to worry about! However, they can't be ignored, especially with kids in the picture. Use these seven steps as a guideline to ease your stress and help you sleep better at night! These steps will simplify your life and streamline your money responsibilities.

1) TAKE A FINANCIAL SNAPSHOT. A common obstacle to taking control of our finances is getting organized. Start by taking a 30-second snapshot:


• How much do you OWE? Include mortgage, credit cards, student loans, personal loans and home equity loans.


• How much do you OWN? Include all investments, bank accounts, retirement plans and home equity.


• How much do you SPEND? This should be one number for your monthly spending. Be sure to include all those extra expenses that create havoc on our budgets.


• How much do you EARN? What is your total income after taxes for the year, the month and year-to-date?

2) DEAL WITH YOUR DEBT AND CREDIT REPORT HEAD ON. The first step is to run a credit report from all three agencies and get your FICO score at www.myfico.com. On the credit agencies websites, you can fix any mistakes you might find. Then consolidate and transfer any credit card debt, to a permanent low interest rate credit card. You can find one at www.bankrate.com. At the same time: stop using your credit cards and go back to a cash basis. Finally, come up with a payment plan to determine when you will be debt free. Create your own at http://www.kiplinger.com/tools/.

3) CREATE A SPENDING PLAN. An easy-to-follow spending plan can make all the difference in your money life. This one is easy to follow and will work wonders for your cash flow. Many of us have gotten used to paying everything with our credit cards and we do not know where our cash goes. As a result, there is not much left over at the end of the month. Sound familiar? Start by living on cash ONLY for the next two months. Then, come up with a set weekly spending amount and stick to it for the week – NO MATTER WHAT! For example: your weekly spending amount is $350 for all your non-fixed expenses (food and clothing included!). You will find that there is more money left over at the end of the month and now you can take your family to Disney World – guilt free! Whatever is in your wallet is your weekly spending money. When you run out of money in your wallet, you are done spending for the week. You can still do the things you love, but you need to prioritize them on a weekly basis. If you have a big purchase that week (i.e. new shoes for the kids), plan accordingly.

4) MAKE SAVING FOR RETIREMENT A PRIORITY: There are so many expenses fighting for your time, that saving for retirement keeps getting pushed to the back burner. For many working moms that feel stretched, I suggest to start saving at least 3% of your income to your 401(k). It lets you take advantage of your company matching and saves you money on taxes. It is not really enough to retire on but it is a great start! If you are already contributing to your 401(k), then increase it by 1% every six months and every time you get a raise. You won't feel it! If you don't have a retirement plan at work, setup an automatic savings to a ROTH or Traditional IRA at a mutual fund company. See if you can maximize the $4,000 limit by contributing $333 automatically every month.

5) SETUP AUTOMATIC SAVINGS. Make it automatic, automatic, automatic. Preferably, setup the automatic savings to a money market that is not at your bank. It is a bit harder to get to but you also can't touch it as easily! Even if you can't afford that much, start at $50 a month. Facts are that people that save on an automatic basis, end up saving more money. Consider ING DIRECT www.ingidrect.com or Emigrant, www.Emigrant-Direct.com. They are currently paying 4.50% and 5.05% on their money market with no fees and no minimums.

6) YOUR CHILDREN'S COLLEGE EDUCATION. With the surge in popularity of 529 plans, more parents are focused on saving for their children's college education. If you feel confident you will be sending your child to a Public University, verify if your state has a prepaid college savings plan. Your money will go much further! If you want to leave your options open, then the 529 plan is a better choice. Some of the benefits include: When the money comes out for an accredited college, it is free of federal taxes, the money grows tax deferred, very easy to use, can be made automatic and the donor (usually the parent) has control. Visit www.savingforcollege.com for more information about your state's plan. Another way to get more bang for your buck is through Upromise www.upromise.com. This company gets you free money for your 529 plan by shopping for everyday things. Finally, you should go online and use a savings calculator to see how much you should save. T. Rowe Price www.troweprice.com has a sophisticated yet easy-to-use site.

7) EXAMINE YOUR INSURANCE. I keep meeting more and more working moms that do not have life insurance. Make sure you and your spouse are properly covered. It does not have to be expensive; you can find very inexpensive term insurance (visit www.accuquote.com). You only need life insurance until your youngest child is 18 years old. To figure out how much you need, check out the life insurance calculator www.kiplinger.com/tools. While you are at it, is your will up to date? If not, make an appointment with an attorney right away. You can also DIY inexpensively with a will program on www.nolo.com.

8) CHANGE A MONEY HABIT. I threw in another step for good measure. Very often, we get stuck in our money habit ruts. A few suggestions to see positive changes in your financial life:


• Open all the money envelopes the day they come in


• Switch money duties with your spouse


• Make your finances as simple as possible. Close and consolidate accounts.


• Say a daily money affirmation. For example: "I am open to receive financial prosperity and abundance."


• Read a financial book


• Call someone. A friend, family member or financial planner. Don't complain but ask for support and guidance on how to move forward. It's always easier working with someone than alone.