Love Mom? Focus her on finances

This Mother's Day, skip the flowers and birthstone necklaces and give Mom something she really can use: A book on money and investing and perhaps a savings account. She might look at you funny, but down the road she'll thank you.

Before I'm accused of being sexist, let me say to the women out there managing money for the men in their lives: Father's Day is just around the corner. That said, women as a group face some unique challenges.

On average, women earn less money than men (80 cents on the dollar) and spend less time in the workforce in order to raise children or take care of aging loved ones. Most women will be on their own financially at some point in their lives because they divorce or outlive their husbands. Only through financial planning can women ensure that they won't outlive their money. This is a common worry; studies have shown that even well-off women fear becoming bag ladies.

Dawn Jurkovich, a financial planner with Ameriprise Financial in Inver Grove Heights, said women are on a "ship" like the Titanic heading for a big iceberg. The word ship is an acronym: "s" stands for Social Security changes, "h" for higher health care costs, "i" for more income needed because of longer life expectancies, and "p" for pensions that are being reduced or going away. The iceberg is retirement. Jurkovich said many women come into her office feeling sorry for themselves. To them her message is : "[Your income] is what it is. If you make less, you have to do more."

She suggests women save 15 to 20 percent of their income no matter what. "I have women who come in here and give me big eyes about how they can't afford to save and guess what? Their nails are done and they have a Caribou or Starbucks coffee in their hand." Other women spend more than they can afford on their children, whether it's for clothes or college.

If money isn't too tight, a working spouse could open up a spousal IRA for a partner out of the workforce. Generally, a spousal IRA behaves and has the same rules as a regular IRA or Roth IRA retirement account except your spouse contributes the $4,000 maximum ($5,000 for those age 50 or older) for you.

To be realistic, many families can't afford to save that much money throughout their lives. Families on one income because they're raising children or caregiving, or families with day-care costs through the roof may have just a percent or two available to save, even after examining their budgets.

But sticking with a savings plan, even if it's a small amount, is critical. "When people start and stop they don't start again," Jurkovich said.

Planning for parents

Cathy O'Keefe and her husband sat down and created a financial plan as soon as they started a family. "We never deviated from putting money into the kids' college fund" or toward retirement, even though it has meant being "extremely conservative in our purchases," she said. As her three children grew older, she took a job as a teaching assistant. But after her father had a series of strokes, she quit and moved him to their home so she could care for him.

Therein lies a key problem: Even women planning their financial future often don't plan for all of it.

While most women feel the need to care for parents later in life, few people plan for that financially, according to a recent survey conducted for St. Paul-based Securian Financial Group. It can mean lost income and increased expenses -- significant sums for each. Half the women surveyed said they worry that they don't have the financial means to help their parents receive quality care.

Fortunately, O'Keefe's family didn't rely on her income, and her dad had some retirement savings available to reduce the financial strain of care. But when he became ill, he didn't have any game plan. O'Keefe and her siblings had to come up with one quickly, and at a very stressful time. The experience has made her realize how important being prepared truly is; she and her husband now have health care directives and wills on top of their financial plan.

Anticipating financial needs, sticking with a doable budget and becoming knowledgeable about finances must be as big a part of mom's job as getting kids to school, checking homework and saving for college. So this Mother's Day, thank mom for taking such good care of you, and remind her to take care of herself too.

Kara McGuire writes about money. Send e-mails to kara@startribune.com or call 612-673-7293. Read Kara's blog: www.startribune.com/kablog.