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Working Mom 3.0: Make your money work

Becoming a stay-at-home working mom often means your financial situation changes, for better or worse. In this installment of Working Mom 3.0, writer Stephanie Taylor Christensen explores three ways to make your hard-earned cash work even harder for you.

About Working Mom 3.0

Couple planning finances
Becoming a stay-at-home working mom often means your financial situation changes, whether for better or worse. In this issue of Working Mom 3.0, writer Stephanie Taylor Christensen explores three ways to make your hard-earned cash work even harder for you.

Hard-earning cash

If you’ve been a stay-at-home mom who didn’t previously have direct income, you may be enjoying a little more cash flow — but also confused about where to put it. If you transitioned from a full-time career and are working toward a new career path as a stay-at-home working mom, your salary may have dwindled. Regardless, it’s critical to keep your money earning for you, whether you’re dealing with more or less. Here are three ways to put your money to work.

piggy bankSavings

When you’re cash-strapped, savings can be hard to build. The key to saving lies in making it habitual, regardless of what you can spare, and finding opportunities to get paid for saving. Though experts vary on the amount of emergency savings that all families should have, the general rule of thumb is a minimum of three months of total household income. (Ideally, you should strive to save up to eight months’ worth). While saving such a large chunk of income might seem unimaginable now,  every little bit helps. If one spouse loses his or her job, those savings will help you avoid drastic and expensive measures that can cripple you financially. Regardless of how much you can save, seek out a high-interest savings account, like those at SmartyPig, AllyBank or DiscoverBank. All pay competitive rates, don’t involve maintenance fees and have low to no minimum balance requirements.


If you lost your employer-sponsored retirement plan when you became a stay-at-home working mom, Uncle Sam is looking out for your future. If you’re self-employed with no employees, establish a SEP IRA, which allows you to contribute up to $50,000 in 2012, or $49,000 in 2011. If you haven’t filed taxes yet, you have until the tax deadline to set it up. Contributions to a SEP IRA are generally 100 percent tax-deductible, and investment earnings in a SEP IRA grow tax-deferred. If you still have access to an employer-sponsored retirement plan, contribute the maximum amount allowed by tax law (generally, $5,000 a year) and take advantage of any employer-match that is offered. It’s free money!

5 Things you can do to prepare for retirement >>

College tuition

It’s never too early to start saving for college. College savings plans known as “529s” allow you to automatically contribute to college savings regularly and grow in an investment tool of your choice. Not only can you deduct your contribution from taxes, funds can be used for tuition and education-related expenses at any accredited university or college — even for adults who are continuing education. Morningstar analysts recognized these six college state savings plans as standouts: Alaska’s T. Rowe Price College Savings Plan , Maryland College Investment Plan, Nevada’s Vanguard 529 Savings Plan, Ohio’s CollegeAdvantage 529 Savings Plan, Utah Educational Savings Plan and Virginia’s CollegeAmerica. In most cases, you do not need to reside in the state to open its plan or attend college in the state.

NOTE: This article is for entertainment purposes only and is not intended for use as professional financial advice.

Working Mom 3.0

The modern woman is redefining what it means to have a successful career. Rather than feeling torn between climbing the corporate ladder and having a happy family life, many women are choosing to merge the two and transition careers from a traditional role to a more flexible one. Working Mom 3.0 is reinventing the definition of “working mom,” as office hours are held at home and revolve around nap times.

This column begins by chronicling the experiences of Stephanie Taylor Christensen, a former marketing professional turned self-employed stay-at-home mom, writer and yoga instructor, as she strives to redefine “having it all” on her own time and terms.

More tips for working moms

Working Mom 3.0: Work at home, spend less
Working Mom 3.0: What’s my worth?
Working Mom 3.0: Starting over mid-career

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