How Can a SAHM Plan for the Future

If your husband is taken away from you in a tragic event what happens to you? Will you have to go back to work? If you haven't planned for this you most likely will have to put the kids in daycare or with family and go to work. What about your house? Can you afford to make the payments along with full-time daycare? You may have to move home to your parent’s house because you can't afford the lifestyle you used to have with your husband’s income.

These are not happy thoughts, but with children at home you have probably thought about these things more than you used too. I used to try and NOT think about it because I didn't know how to plan for the future. Denial, it ain't just a river in Egypt. What can you do to make sure that the loss of your husband doesn’t mean the children lose their mother to the workforce?

The best thing to do is to buy some Term Life Insurance for both you and your husband (What if you passed away, how would your husband replace you? He would have to pay some hard earned money to someone to take care of them). Buy your policies at about 10 x your husband’s income, and for you 10x what you would need per year to pay for childcare. You want Term Life only because it is a much better deal. In the long run you save more money with Term Life.

If your husband makes $50,000/year your policy should be for $500,000. Let’s say your husband passes away, when you receive $500,000 from the policy you take it immediately and invest it. The average annual return on mutual stocks is above %10 a year, so $500,000 properly invested earns interest of $50,000/year. You can live off the interest and keep the principle invested. You just replaced your husband’s income. It’s really very simple and with a little planning you can feel a lot safer.

This plan is taken directly from the teachings of Dave Ramsey. This and more can be found at his website. Also on his website is a link for Term Life Insurance Quotes from Zander Insurance. Dave himself has life insurance through Zander Insurance.