Professional, Mommy & Household CFO

Here are five financial tips for today’s working moms.

In these tough economic times, families may be putting themselves at greater risk by placing more value on the man of the house, even though almost two-thirds of today’s families depend on two incomes to make ends meet, according to the U.S. Bureau of Labor Statistics.
 One example is life insurance. LIMRA, an association of financial services companies, reports that only 36 percent of women are protected with group life insurance at work, and only 40 percent have their own individual policies. LIMRA also says that women who do have life insurance have much less coverage than men, on average.

“I think underinsuring the woman, whether she is a working or stay-at-home mom, makes no more sense than underinsuring the man,” says Beth Wood, assistant vice president of business and women’s affiliation marketing at Massachusetts Mutual Life Insurance Co. (MassMutual). “There are just too many underinsured couples putting their families at risk.”

So how prepared is your family? Start by asking yourself these five questions:

1. What are your family’s total monthly household expenses?
 Make a list of regular, recurring expenses. Beyond the obvious expenses like mortgage, groceries, phone, cable and utilities, don’t forget about savings for retirement, children’s education, vacation, property and excise taxes, car and health insurance, and money set aside for emergency expenses.

2. What is Mom worth, anyway? â€¨A mom’s value goes well beyond a salary. According to the May 2008 Mom Salary Survey from Salary.com, a stay-at-home mom brings $116,805 in services to the family each year – from cooking and cleaning to shopping, shuttling children around and a range of other domestic duties.

3. Would a surviving father have to cut back on his hours to care for the children?
 If a family loses the mom, her husband may be forced to cut back on his hours, pay for childcare, or pay bills by dipping into his retirement funds or using money he and his wife had saved for their children’s education.

4. What risks have I overlooked or not fully considered?
 When thinking about financial strategy, people sometimes concentrate on the risk of premature or accidental death – to the point where they actually overlook other, more likely risks to their well-being and livelihood (for example, a breadwinner unable to work due to an illness). Be sure to think broadly about the financial risks you face today or may face in the future.

5. Are my plans flexible enough?ʉ۬To build a strategy that will stand the test of time, it must be flexible. There is a whole host of ways that financial solutions can be structured to provide future flexibility and adjust with your evolving needs. A financial professional can help you with your unique, personal situation.