A Helpful Checklist for Women with Growing Families
- Create a budget and determine how much money you can save each month for retirement, college, and emergencies. Update your budget if you have a child on the way.
- Find ways to reduce expenses.
- Try to contribute at least 10 percent of your pay into your 401(k) or IRA.
- Determine the potential cost of college and how much money you can save.
- If you can’t maximize your retirement savings and put away money for college, it’s more important to save for retirement, as loans and scholarships can help pay for higher education.
- Begin saving enough to cover three to sixth months of household expenses in case of an emergency.
- Take steps to reduce any credit card debt. If you’re paying high interest charges, ask your issuers to lower your rate or find cards that offer lower rates. Taking out a home equity loan is one way to consolidate debt at a much lower interest rate.
- Avoid taking money out of your 401(k) or IRA—in addition to paying income tax on the withdrawal, you’ll have to pay a 10% penalty on the withdrawal before age 59 ½, unless an exception applies.
- Make sure you and your partner have enough life insurance and disability insurance to enable your family to maintain its lifestyle in the event one of you is unable to work or passes away.
- Take advantage of all of the tax breaks available to families with children.
- Draft a will or update the one you have to name a guardian for your children.
- Teach your children about money and your family’s financial situation as soon as they are old enough to understand. Having their own savings account is a great way to show them how to strike a balance between saving and spending.