Gone are the days where women wait around for prince charming to sweep them off their feet and save them from debt.
Even with the gender pay gap — in which women on average earn 80 cents to every $1 earned by men — women are out-earning men and are more independent than ever before. In an era of empowerment, it’s important for us to also empower our wallets. Here are some smart money moves women can make to be more financially confident and save for retirement:
Obviously, there’s no one formula for everyone because your financial situation is different from your sister’s, mom’s, friend’s, and partner’s. The tips I will share in this post are relevant to both sexes, but I am specifically focusing on women here because of the gender savings gap, where women traditionally invest and save less than men.
According to data from Nationwide Advisory Solutions, only 62% of women have a plan to help protect themselves against outliving their savings.
When I first started out thinking about my financial health and my budget– I didn’t fully understand finances, and at that time trying to get out of debt as a single person felt even more difficult. So I really had to educate myself and put together a plan and goals.
Set Specific Goals, Both Short-and-Long-Term
Goals are not set in stone and are meant to be fluid. It is absolutely okay to change goals, whether single or as a couple, when you realize your wants and desires have changed. Your goals should motivate you. If they don’t, then it’s definitely time to reevaluate and adjust goals. Pro-tip: Create a money mantra for yourself. It may sound silly, but you believe what you tell yourself.
If you want to feel empowered financially, you have to understand your current financial reality and see where you stand. When you make a budget remember to start simple by listing what money is coming into the household and what is going out. List out your recurring monthly expenses such as food, utilities, and rent. Don’t forget about all those $5 coffee runs since they add up quickly.
Create a Plan to Eliminate Debt
Don’t dig yourself into a hole, expecting Prince Charming to save you. He may not come around for years and no one wants to climb into debt. Money is emotional and I’ll be the first to admit that I am particularly great at using my emotions to justify splurges, sometimes spending more than I should.
If you have debt, don’t ignore it. Figure out what emotional triggers cause you to spend, so you can better manage those emotions and begin aggressively paying down your debt.
Women are natural protectors and some women have the propensity to focus on taking care of everyone around them but themselves. (I’ve been there!) But remember: “You can’t pour from an empty cup.”
Don’t forget to add this smart money move as a bullet to your to do list to build a habit of checking in with yourself financially. For example, when taking on more financial responsibility in life it’s important to consider the types of insurance you may need to have coverage during the unexpected.
One insurance that you definitely want to consider is disability. Think for a moment about what would happen if god forbid you get in an accident, you were injured or ill and couldn’t work. Would your savings plus any spousal income plus any payments you were able to get from Social Security Disability Income be enough to live on until Social Security? If not, you might want to consider it.
Invest in Retirement
If your image of investing is saving thousands of dollars before you invest, it’s time to shatter that image. These days you can invest with $100 or less, and you can do it from the comfort of your computer or smartphone. Some options include a 401(k) plan, Roth IRA, robo advisors, micro-investing and a savings or money market account. Make sure you are contributing to automatically from your paycheck. If you’re nervous about investing, start with saving $1 and then keep adding a little bit out of every paycheck towards retirement.
You are in charge of creating your own happily ever after, and although getting a better understanding of money takes work, it doesn’t have to be overwhelming.
Which smart money moves will you take first in your journey toward financial freedom? Let us know in the comments!