A helpful checklist for women with growing families
Create a budget and make sure you and your partner/spouse are on the same page regarding your family's finances. Determine how much money you can allot each month for retirement, college and emergencies.
Remember to update your budget if you have a child on the way.
Begin saving enough to cover three to sixth months of household expenses in case of an emergency.
Find ways to reduce expenses. For example, determine if it is more affordable for you and your spouse to both work, or for one spouse to become a stay-at-home parent to avoid the often high costs of childcare.
Determine the potential cost of college and how much money you can save. If you can save, consider using a 529 college savings plan.
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.
Take advantage of all of the tax breaks available to families with children.
Teach your children about money and your family's financial situation as soon as they are old enough to understand. Setting up a savings account for them is a great way to show them how to strike a balance between saving and spending.
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.
Draft a will or update the one you have to name a guardian for your children.
Try to contribute at least 10 to 15 percent of your pay into your 401(k) or IRA and make sure your partner is also doing this to maximize your retirement savings.
Don't turn down free money. If your company offers a match, contribute the percentage of your income that is required to be eligible for the match.
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.
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 percent penalty on the withdrawal before age 59½, unless an exception applies.
If you can afford to do so, you or your partner should consider investing in a mutual fund and/or your company's stock, especially if your employer offers a discount on the purchase.
When your children become teenagers, consider teaching them about investing. A good way to do this is by introducing them to money-market accounts, savings bonds and certificates of deposit.
Think about buying a home or apartment as soon as you can afford it. You'll not only build equity, but some of your mortgage interest and property tax is generally tax deductible.