It’s not always an obvious decision to have a stay at home parent go back to work once the kids are in school. Although most families could put a second income to good use, it’s not always offset by the convenience and peace of mind that comes with having one parent always available to chauffeur to their after-school activities, for sick days, snow days, school vacations, to help with homework, cook meals and clean (whew!). Many stay at home parents are also finding that it’s not easy to get hired after so many years out of the workforce with so much competition for jobs.
If you are or are planning to be a long-term stay at home parent (or being the breadwinner in such a family), here are five action steps to take to make sure that you and your family are as financially protected as possible.
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Many of us read financial websites most days of the week, if not every single day. Let’s face it, people like us care about money. We spend so much time thinking and reading about money matters that we sometimes know how a particular article will be structured as soon as we finish reading the title. We feel that by reading, thinking and talking about money, we can somehow become wealthier.
But yet, this isn’t good enough.
In order to be financially free, reading and thinking about money advices isn’t good enough because we also need to apply what we learn. Everyone knows that eating out costs much more than cooking and bringing a brown bag to work, but only those who are motivated will actually take the time to cook at home. Everyone knows that taking on a huge debt to buy the fancy car is not a good financial move, but it truly takes discipline to control the impulse to buy on the spot.
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You will often hear real estate professionals, personal finance gurus, and know-it-all relatives talking about how home renovation choices can affect your resale value. And while I don’t think that these experts are necessarily wrong, they often only tell half of the story. Homeowners should embark on home improvement projects because they want to live with the result, not because they are hoping to make their house worth more. Making decisions about home renovation based on what someone else might like is the way madness and beige carpeting lies.
However, it is important to note that you will never recoup your investment on some projects. If you truly want to go through with these five renovations, go for it! But if you know your time in the house is limited or if you are spending money in the hopes that your home’s value will increase, you’re probably better off just watching This Old House and leaving your home well enough alone.
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The new economic reality is forcing many to broaden their search for new employment. This means looking for jobs outside of their local area with commutes of an hour or more each way. But how much does a commute really cost? Is it just time, or are you wasting other precious resources too?
Long Commutes Costs Money
Your long commute is wasting precious time that you could be productive instead. If you work a job with an hourly pay rate, this will be quite clear. This is an extreme example, but let’s say you are a lawyer charging $250 per hour. Now assume you take 15 minutes of your commute per day on billable work. If you work 250 days per year, this amounts to over $15,000 earned a year. What could you do that money?
Not everyone works for $250 an hour, of course, but you can see how even small amounts can add up over time. And what about having a job where you don’t get paid by the hour? This is where the financial burden will be harder to calculate, but you can probably answer it for yourself. How much better could you do your job with an extra 30 minutes every day? How about an extra 15? Over the course of the year an extra 15 minutes per day adds up to over 60 hours of work. How much more effective could you be with 60 more hours of work?
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Not too long ago, I opened a Health Savings Account. One of the questions I was asked when I opened the account was this: Who is your beneficiary?
This is a very important question that many people don’t think much about. It’s a little bit easier to remember include beneficiaries on insurance policies — especially life insurance. However, it is less common to think about who will get the money from your bank account, or from your retirement account.
Bank Account Beneficiaries
When you have a bank account, the money in your account doesn’t automatically go to your spouse or someone else. With a joint account, of course, the money is accessible to the other person without any trouble if you should die. However, if you have the account in just your name, your spouse or other heirs can’t access the money without going through the probate process. And, when it comes to bank accounts, simply stating what you want to have happen in your will isn’t always enough to avoid probate.
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Don’t worry if you’ve spent a bit more than you’d like to have done this holiday season, because you’re probably in excellent company. Unexpected expenses can happen at any time of the year, it just seems to happen more frequently around this time of year. Anything from finding out your little black cocktail dress from last year has mysteriously gotten smaller to last minute gifts to unexpected travel delays all add up to big bucks and can make a healthy savings account start to look mighty sickly.
There is still time before the holidays, but if you’re already feeling anxious about how much you have/will spend, don’t despair because you can recover – just don’t use breaking the budget a little bit as a justification for breaking it a ton! Here are a few tips that will help you get back on track and pay off the credit cards and/or get your bank balance back up.
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