Finance for Women
Managing our Money
We’ve all heard the saying that romance without finance is just a nuisance, well life without finance is also a nuisance. More and more, women are going it alone without a partner and manage their finances on their own. Even if you are not single, you still need to know how to handle your finances. Here are a few key principles to keep in mind:
· Money is just an idea (find the right idea to increase your money flow);
· Building wealth is mathematical not magical;
· Never buy more than you need (including real estate);
· Know how much you owe your creditors;
· Maintain good credit - bad credit will cost you.
Now that we have covered some of the basic principles - let’s talk about getting your financial house in order:
· Invest in Yourself each Week – We spend discretionary (wants) money on things we do not need or even want... If you invest $85 a week at 8% from age 20-65, by the time you retire, you will have well over a million dollars;
· Diversify – Take advantage of all the financial vehicles available to you; mutual funds, 401ks, 403Bs, ROTH IRAs, Stocks etc... Just remember 40 - 40 – 20. Invest 40% in low-risk vehicles , 40% in moderate-risk investments and 20% in high-risk investments;
· Create an Emergency Fund – An Emergency Fund should cover a minimum of three months of living expenses but six to twelve months is the ideal amount of living expenses to save;
· Look for ways to maximize your money by:
a) Asking for lower rates on credit cards/loans;
b) Asking for a review on your car insurance - (this saved me $600.00 a year). Inquire about combining several insurance policies for discount rates;
c) Reviewing your current cell phone contracts – can you get a lower rate? Sometimes the cell phone providers will offer a discount if you work for the government or other large employers;
d) Aggregating your accounts - this allows you to view all your accounts (including investments) on one screen. Most financial institutions offer this service at no cost to you.
· Actively Practice Risk Management – If you do not have life insurance – GET IT! You can purchase permanent/whole life insurance (more expensive with a cash pay-out option) or term life insurance (less expensive). Term life insurance is generally purchased to cover one’s working years in the event of their death. Life insurance benefits those left behind; it should cover the loss of your income.
· Get Renters Insurance - If you are a renter, you cannot afford to not have Renters Insurance. It is a small price to pay for peace of mind. Remember your landlord is NOT responsible for replacing your “stuff” in the event of a fire or flood. Likewise, if you are a homeowner, obtain Homeowners Insurance which covers your belongings, liability, and the exterior of your home.
· Pay Bills More Often – Yes, pay your bills more often but pay the same amount. For example, pay your $30 credit card bill in two installments of $15 increments. This decreases the amount of interest paid throughout the life the credit card due to the number of days between payments and interest accruing.
We have covered a few ways to become fiscally fit. If you educate yourself in money matters and take action, you will achieve your goals in a shorter period of time. Onward!
If you have any questions or comments about this article, please contact Rhondra O. Willis at rhondrawillis@hotmail.com.
