Tuesday, October 25, 2005

Q I’m a 41-year-old single mom with a 12-year-old daughter. Thankfully, her dad has a great job, is saving for her college and is very good with child support. I am self-employed as a pet sitter.

Can you recommend a book or Web site that will help me plan for my future and also help me get my assets in line for my daughter in case something happens to me? I have almost $42,000 in savings and mutual funds — more than half of that is in a regular savings account, which I know is not the best place for it. I’m planning on having more taken out each month from savings for mutual funds — an index fund and a REIT fund.

A: You and your ex-husband both need to protect your daughter in the event something happens to either one of you. To do that, you should both have adequate term life insurance and long-term disability insurance to protect your employment income. I hope you know that you should all have comprehensive health insurance. You and your ex-husband also should have wills drawn up, if you haven’t already done so.

Because you have self-employment income, you can establish your own retirement-savings plan, such as an SEP-IRA (simplified employee pension-individual retirement account) or Keogh. You could invest through a major mutual fund company in the types of funds you suggested in your note.

To answer your main question about books and Web sites for learning more about personal finance, I am partial to books. For a crash course on money matters, please check out my “Personal Finance for Dummies.” Tread carefully on the Web. Believe it or not, among the best resources I’ve found online are the investing-related resources at www.vanguard.com.

• E-mail Eric Tyson at eric@erictyson.com.


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