Building your financial foundation

Women have a unique set of challenges when it comes to financial success, stemming from two facts: While stay-at-home-dads certainly aren’t a novelty anymore, women tend to do the bulk of the caregiving for relatives young and old, which reduces earnings. Not to mention women on average earn less than males do. Women also tend to live longer than men, amplifying the fear that their money will run out. Whether you’re working or staying home, doing what you can to take care of the five “Cs” will build a more solid foundation for your finances now and down the road.


Having proper life and disability coverage is key for breadwinners. Yet many families forget how important it is to insure against the devastating loss of the primary caregiver. You’ve seen the estimates for how much a mom should be paid, right? The latest measure is $112,962 according to’s 2012 Mom Salary Survey. Sure, it’s a silly survey and plenty of caveats exist, but it drives home the point that every parent in the family needs insurance coverage, whether they bring home a paycheck or not. And it’s often far less costly than you’d think.

Cash on hand

Many couples merge their bank accounts when they move in together or get married. It makes sense in many cases—shouldn’t your financial life mirror your personal life? But it also makes sense to have small accounts for individual pursuits, whether it’s gear for a hobby, or to splurge on a monthly manicure. Having a small account that gives you the freedom and flexibility to spend money without permission is important and empowering.

Saving for the future is also critical, even if you are staying at home, or working less. It’s not easy, considering the cost of raising kids and college expenses that will arrive sooner than you think. But we’ve all seen the charts showing how much further your money goes if you invest early, thanks to the magic of compound interest. And since women live longer, having a sufficient nest egg is critical. If you have a job and your employer offers matching money in a 401(k) retirement plan, make sure you invest as much as needed to receive the full amount of free money. If you don’t receive matching money, you may want to consider a Roth IRA. Even if you don’t work, you can still invest for retirement using a so-called spousal IRA, even though you have no earned income.

Credit of your own

Having a solid credit history and score is critical, even after you are married or partnered. There is no such thing as a joint credit report or score and you never know if down the road you’ll need to stand on your own financial feet. Have credit in your own name. Period. There was some concern that new credit card regulations were making it difficult, if not impossible, for stay-at-home spouses to build credit without the income-earning spouse applying jointly for the card. The Consumer Financial Protection Bureau has proposed a rule to revise the law.

If you have less than stellar credit, consider getting an unsecured credit card, making transactions and paying on time until you can qualify for a standard card. If you’re not sure about the quality of your credit, get a free credit report at You should do that at least annually, anyway.


You may not manage the household finances today, but chances are you’ll be in charge of the decision-making at some point in your life. Why wait until you absolutely have to manage your money before getting involved in both day-to-day money matters and investing? Odds are you’re better at investing than you think. Although both genders make plenty of mistakes when it comes to money management and investing, it’s been proven that women actually earn greater returns because they are more cautious than men and don’t trade frequently or take outsized risks. That’s just one reason why women should be more confident about money. Yet a recent survey from Prudential found twice as many women as men describe themselves as financial “beginners.”


There’s nothing more cathartic than commiserating about a complex and frustrating topic with a close friend. That’s why the money club concept is catching on. But for those of you who still feel money is a taboo topic not to be discussed in social circles, there’s the web to the rescue. There are numerous places to turn to for financial education and support, geared toward women. Citi’s Women and Co. website ( has been around for more than a decade. Two more recent entrants, and, both founded and run by women for women, provide financial advice, education and camaraderie. There are plenty of female money mavens to follow on Facebook and Twitter. Many of them also have blogs. Check out for a recent list of women money bloggers.

Kara McGuire is a personal finance writer and a St. Paul mother of three. Send comments, questions and story ideas to