Prudent Financial Planning For Working Mums

Elaine Brookes Steve Case

Author: Steve Case - Insurance Expert

Reviewed & Fact Checked By: Elaine Brookes

Updated: 8th December 2023

Working Mums Have Three Main Priorities:

  1. The health of their kids
  2. Their children’s happiness
  3. Providing financial security for their family

Stephen Crosbie of Aegon UK points out though… many are falling short at the financial planning stage to provide some level of financial security for their families.

Financial Planning For Working Mums

Thousands of women have started their own businesses, gaining more flexibility over working hours but failing to put financial protection in place.

Worse yet, there’s no certainty to many of the businesses either because the Director is in the driving seat, running the business with no succession plan in place in case they’re not around to run the show.

If the worst were to happen, not only would the funds begin to shrink, but the business would likely fold. Just when you’d think things couldn’t get worse, that’s when they would.

We Compare The Leading Life Insurance Companies For You – No-Obligation – 60 Sec Form

mums life assurance providers
  • Our price match promise means we will find you the right cover for your personal circumstances at the lowest price possible. Terms & Conditions and Privacy Policy

It’s not just business owners, either. More than half the female workforce in the entire country doesn’t have any wealth safeguards in place.

In fact, a third of Britain’s working Mums are responsible for their household finances and families.

That’s a lot of money being gambled with.

And it’s only the tip of the iceberg…

Insurance provider revealed what it really costs to run a home.

“Owning a three-bedroom home in the UK comes with average annual running costs of almost £20,000 (£1,634 per month), with rented three-bedroom homes only slightly less expensive at just shy of £19,000 per year (£1,576 per month).”

That’s for any region. Those on less-than-stellar salaries can see half of their household budget spent purely on running the home before considering the cost of raising a family or child.

With costs that high, it’s easy to see why women don’t put the cost of financial protection high on the list of priorities.

What some do and smartly, though, is a factor in financial planning when choosing to take a new job with a company. That’s something Stephen Crosbie of Aegon touched on – The priorities women in payroll employment have when deciding to take a job or decline the opportunity.

Unfortunately, it only ranks fifth and sixth on the priority list. The top priority is flexible working hours, which explains why there’s been a surge in women going down the self-employed route.

Not many employers will take the responsibility of arranging protection for staff members. You need to do that on your own whether you’re your own boss or not.

Three types of affordable financial protection are:

  • Income protection
  • Life insurance
  • Critical illness cover

When cost is a factor, don’t try to pack in all three levels of protection. Protect what’s most important to you first, your income or your life. In most cases, it’s a women’s life insurance policy to cover a worst-case scenario.

However, being unable to work will still be one large tussle when you’ve lost a significant portion of household income due to ill health. Especially when you consider the cost of running a home is in the region of £20,000 per year. There’s no way you’ll get that on long-term sick pay.

The smart play is to check out what level of protection is affordable. Studies are repeatedly showing assumptions being made that levels of financial protection are unaffordable, particularly for lower-paid workers or those working part-time hours.

If the minimum wage is holding you back from putting protection in place for the three most important priorities for working parents – the health of your children, financial future, and their happiness – there’s a rise coming shortly of 30p per hour for those over 25.

That money could be used since; without the changes coming into effect, it wouldn’t be there anyway.

If you can’t dip into your wage packet, cutting what you already have going out is the only other option.

One of the simplest tricks to lower your monthly outgoings is not to cut back on spending but instead cut your payments. You don’t do that by leaving yourself short of paying down debts faster.

To cut back smart…

Haggle on everything you can!

Money-Saving Expert has ten companies listed that are ripe for haggling on a hit list you can begin with to negotiate cheaper deals, with the details on how to haggle the smart way too. There’s likely at least one company on that list that you can call their support line and put things in motion to get a better deal.

In Conclusion

Research indicates working women would love to feel that their entire family is protected financially, but it’s out of reach due to the expense. It’s not.

It’s affordable, but if cost worries you, the smartest way to put things in place is to call companies you’re already paying, reduce your charges, and move money around.

Or, for those earning minimum wage, use some pay increase when the National Living Wage comes into effect on April 1st. After all, part of living involves good money management.

When you finally get the insurance, keep in mind to inform your family about it. As a result, in case of your death, it will be easier for them to get the money without struggling with lost and unclaimed insurance policies.

Related Reading