Today, women are expected to fulfill numerous roles, including those of the devoted wife, the compassionate mother, the generous caregiver, and the hardworking professional. This “women can have it all” mentality means that women are expected to manage stable financial lives and a household.
Although there is nothing a woman cannot accomplish on her own, most of them appear to be ignoring a crucial aspect of their lives: their financial life. Women need to involve themselves sufficiently in the financial decisions directly affecting them, whether due to a lack of time or a preference for delegating critical financial decisions to the males in their lives.
This is particularly true for married women, who are more inclined to relinquish financial power to their spouses than to keep actively participating in money management.
We implore the women reading this to regain control over their finances and secure their financial futures in light of the ongoing social change, social standards, and gender roles. These six financial moves can be helpful.
1. Set up a budget
While it might not seem like the most exciting task, this one is quite crucial. You can only start making your money go where it ought to if you know where it’s going. This is how:
Assemble three months’ worth of bank and utility statements, credit card statements, auto and mortgage statements, general receipts, etc.
- Add up all of your income sources.
- Using your acquired documentation, make a list of your monthly expenses.
- Distinguish between fixed and variable costs.
Mortgage, rent, and auto payments are fixed expenses that remain consistent over time or nearly so. Groceries, petrol, meals out, and entertainment are examples of variable expenses that fluctuate from month to month.
Subtract costs from revenue
If your income exceeds your outgoings, you can use the extra funds to save for retirement or pay off debt. The following stage becomes much more crucial if your spending exceeds your income.
Determine how you may reduce your variable spending, for as, by cutting back on eating out or terminating that expensive TV subscription.
If it still isn’t enough, look closely at your fixed costs or consider measures to boost your income, such as requesting a raise.
2. Avoid and eliminate debt
Debt is more common among women than among males. Not only do they spend more money, but they also neglect to make credit card payments.
In addition, women frequently borrow money from their family members. It is of interest at times and not at other times.
It’s crucial to avoid taking out loans to spend the money on demands. Only borrow money if it is truly essential. Take no loans if they are not required.
Nowadays, we’re all multitaskers, and the same frequently applies to financial matters. You’re attempting to pay off debt, put money into your 401(k), and save for a down payment on a house. You spend your money on far too many things. The time has come to pay off any debt you may have.
Build an emergency fund of $1,000 as a start, and then stop saving and investing after that. List your debts from smallest to largest, independent of interest rate.
Once done, you can enroll in a debt consolidation program to replace your multiple high-interest debts with a single monthly payment plan.
Although there are other ways to consolidate debt, this is the best way to consolidate credit cards. In a debt consolidation program, the debt counselors negotiate with creditors for lower interest rates and monthly payments, citing your financial problems.
If creditors are convinced, they can offer you an affordable repayment plan. That would help to generate savings.
3. Contribute to a retirement fund
Pensions are fast becoming a thing of the past, so you must pay yourself first. A general guideline is to put 12% to 15% of your income into a retirement fund, but if it sounds out of your price range, set as much as your budget will allow and then aim to increase it by one or two percentage points a year.
A 401(k), IRA, or Roth IRA are basic options, and automated contributions make it easy and practical.
4. Be aware of your social security advantages
You’ll need to know when it will be best to begin claiming your benefits as retirement draws near. Depending on the year you were born, you can receive your full benefits at a certain age.
5. Stop comparing
Comparison is a debt-producing dead hole. Stop trying to keep up with Instagram followers and shopping swipe-up links. This results in you living a life you might not enjoy in place of one you might appreciate!
If you find this problematic, set time limits or take a break from social media.
6. Build an emergency fund
Saving money for emergencies is always preferable to borrowing or using credit cards. It reduces stress and interest costs significantly. One habit that needs to be ingrained is saving. It’s the first step in learning how to manage one’s finances. Women in kitchen jars always kept the money.
It’s now time to start saving money in a bank. Establish an emergency fund that can be accessed in times of need. Be aware of the recommended balance in your savings account.
Finally, it would help if you built your credit.
Start building your credit today because it will affect your capacity to reach significant financial milestones like getting an auto loan or a mortgage.
Keep an eye on your credit score and learn how it is calculated. You can only improve your credit if you understand what influences your credit.
Get a credit card and treat it like a debit card by making monthly payments in full. Maintain a low utilization rate. When you spend more than 30% of your available credit, holding a credit card will start harming rather than benefiting your credit score.
Remember that late payments can harm your credit score for years, so pay your bills on schedule.
Lyle David Solomon
Lyle Solomon has extensive legal experience, in-depth knowledge, and experience in consumer finance and writing. He has been a member of the California State Bar since 2003. He graduated from the University of the Pacific’s McGeorge School of Law in Sacramento, California, in 1998 and currently works for the Oak View Law Group in California as a principal attorney.