5 Ways Moms Can Invest and Take Care of Personal Finances
A woman should be actively involved in planning for her family’s financial well-being. And being financially secure goes beyond meeting your family’s basic needs; it also meets their physical, emotional, and mental needs, and they are at ease knowing their investments will take care of their future needs.
Investing matters a lot, and it’s an effective way to put your money to work, potentially building wealth. Smart investing allows your money to increase in value while outpacing inflation.
Here are the top ways moms can invest and care for their personal finances.
Opening UGMA Accounts
Another smart way for moms to invest in their children’s future is by opening UGMA accounts. These custodial accounts make it easy to transfer assets like cash, stocks, and mutual funds to your child while maintaining control over how the money is managed until they come of age. Unlike education-specific savings plans, UGMA accounts give your child the flexibility to use the funds for anything they need—whether that’s college tuition, a first car, or even starting a business. Plus, they offer potential tax benefits and no contribution limits, making them an accessible and powerful tool for building long-term wealth for your family.
Invest in Real Estate Investment Trusts (REITs)
REITs own and operate income-generating real estate, including office and apartment buildings, hospitals, warehouses, hotels, shopping centers, and commercial forests. Others invest in financial real estate.
REITs raise funds by selling shares and issuing bonds, using the proceeds to reinvest in income-generating real estate. Shareholders then get a share of the profits after tax.
REITs are a safe investment that removes the fuss of owning real estate. The management handles the hard part of ownership and rental logistics while you sit back as the property appreciates or generates profits with attractive dividends.
Invest in an Index Fund
An index fund is a composition of many stocks. And investors benefit from the diversification and low-risk investment of the portfolio. If an individual stock’s price drops steeply, it won’t affect your portfolio much as it’s part of a larger index.
An index fund works best when you are investing for the long term. It’s a proven strategy for building wealth, especially for newbies in the stock market.
Monitor your Financial Accounts
In 2023, you have every reason to be proactive about cybersecurity, as protecting your money is equally as crucial as investing it. The first step is to track all your accounts-banking, retirement, credit cards, and student loans. At the very least, start by turning on your multi-factor authentication on these accounts for an extra layer of security.
Next, you can take various safety precautions, such as setting up credit report monitoring. You can also freeze your credit accounts if you plan to wait for a while before applying for credit. A freeze protects your funds from cyber criminals trying to open new credit lines under your name.
A password manager is also great for helping you track your usernames and passwords across multiple devices. The password manager makes it easy to use different passwords for each account for enhanced security.
Create a Household Budget
A budget can force you to cut back on unnecessary spending and divert these funds into other investments, such as stocks. And it helps you to save more while slowing down on credit card spending.
Apart from having an investment plan, a budget can also help you increase your emergency fund kitty to cushion you if your home plumbing springs a leak, your car breaks down, or you need to pay for health care. Your emergency fund should be about three to six months’ worth of living expenses to ensure you still live comfortably, even in bad times.
Finally, a budget gets you closer to reaching your financial goals since you’re emotionally invested in them.
The Takeaway…
If you’re especially new to stock investing, motley stocks gives insights and all the practical tips on where to put your money and get a good return on investment.
While there’s no one-size-fits-all investment approach for reaching your personal finance goals, your investment strategy should balance your risk tolerance, expected returns, and liquidity needs.
The stock market serves as the best example: When the stock market gets rocky at times, it’s natural to want to save money by pulling back. But this could be the wrong move. Instead, you should see it as a buying opportunity during a down market.