As a mum, it’s important to secure your financial future, not just for your children but also for your partner and, of course, yourself.
But with the rising cost of living to contend with, a dollar isn’t going as far as it used to. So, what steps can you take to ensure you are financially stable in the years to come?
Here are seven strategies you should consider.
1. Start saving money
If you are not already saving money on a regular basis, you should start the process right away.
They say a little goes a long way, so you should try and save as much as you can spare on a weekly basis.
You will be surprised how quickly this can accrue. For example, according to the moneysmart.gov.au savings goals calculator, you can save $25,000 in 10 years if you put $169 a month away ($42.25 a week) in a bank account that offers 4% interest.
If you are able to put away $679 a month ($169.75 a week) over a 20-year period in a 4% interest account, you’ll have saved $250,000.
Your financial situation will obviously dictate how much you can save. But the sooner you can do it, the sooner you will be able to start improving your financial well-being.
2. Invest
In addition to saving money in a bank account, you should also try to invest some money.
There are several ways to do this, including investing in real estate, topping up your superannuation, increasing the value of your current home, and buying shares.
If you choose to do the latter, make sure you only invest what you can afford to lose.
That said, you might also want to consider buying shares in an established company like the Commonwealth Bank of Australia, which has performed very well on the stock market over many years.
You can see their current share details and track their recent performance by researching CBA ASX.
3. Reduce debt
Becoming financially stable isn’t just about saving and investing money. It is also about reducing your level of debt.
When you are in debt, you are in a vulnerable position because if you can’t honour your repayments, you might find yourself in trouble.
Additionally, debt comes with interest, which means the longer you have a deficit owing, the more money you’ll eventually end up forking out on it. Therefore, it is important to try to reduce your debt as quickly as possible.
Two good areas to focus on are credit cards, which usually have a very high interest rate, and your mortgage, which could save you thousands of dollars during the course of your loan if you pay over and above your weekly repayments.
4. Reduce spend
Another good way to improve your overall financial well-being is to reduce your spending.
It follows that the less you spend, the more money you will be able to save or use to reduce your debt.
So, while you won’t want to live like a puritan, it would be worth identifying areas where you can curb your spending. Eating out, alcohol, and shopping are some to consider.
5. Get a side gig
Life as a mum is always busy, but if you are serious about improving your financial situation, it is a good idea to get yourself a side gig.
There are a range of ways mums can make additional revenue to contribute to the household finances, including affiliate marketing, tutoring, freelancing and blogging.
If you can devote a couple of hours a day to the venture, especially if the kids are at school, you could end up generating decent amounts of extra cash.
6. Downsize your home
We all dream of having a significant financial base on which to fall back on. If this is something you’d like to achieve sooner rather than later, a good way to do this is to downsize your home.
It might be a more viable option for mum’s whose children have left the nest. However, if you are able to sell your home and buy a cheaper property, you will secure yourself a nice monetary buffer, which you could save or invest.
By doing this, you might also be able to reduce your mortgage debt as well.
7. Rent out a room
If your residence is conducive to doing so, you could generate extra income by renting a room through Airbnb or Vrbo.
You will need to check your local council’s zoning regulations to determine if you are allowed to do so. But if you are, it can be a lucrative venture.
Depending on the configuration of your home, you might even be able to arrange for the person staying there to have a private entrance, which means you won’t need to interact with them during their booking.
