For Women Banking on a Bright Financial Future
We tell women how to dress for an interview and tips on what to say, but how to stay financially viable is not always common knowledge. Knowing how to get a job is just the beginning. And having a job is just one part of your financial plan. You have the job, now what? What you do with your money while you are working has everything to do with how bright your future will be. Life also has its unexpected interruptions, and we aren’t always prepared for them. Smart women are learning how to budget, project their needs, fund goals, pay debts, and save for retirement. Unfortunately, I didn’t practice all of those safeguards. Take heed if you would like to assure your future prosperity.
My dad wanted the best for me and even started a bank savings account before I was born. Sadly, he passed away when I was 31, but he did start me out on a good course.
As a single woman, I always did my best, working my way up trying to get better and better jobs to create a career. That included taking lots of classes to improve my skills to keep up with changing technologies and to be eligible for new job opportunities. With a good work ethic, the plan was to move up and to improve myself financially via my job choices. However, things didn’t work out as planned.
I focused on my career but not on the future. I was too busy trying to make headway in my present. And so, at this later part of my life when many are retiring, I’m still writing away. Fortunately, I consider being a writer a privilege. Do I wish I had planned better, as my dad did when he opened up that savings account for me? Yes, I do. But looking back, I did the best I could at the time. And I never would have thought I would need to caregive for my mother for 6 years. I can’t go back, but I can figure out what I should have done and maybe help others.
If you plan ahead and use caution, you can enjoy a good life. Planning ahead doesn’t always lead to fame and fortune, the perfect relationship, perfect children, or even a home. However, being mindful of your finances can lead to the freedom to live the kind of life you want to live.
For sure, having a better relationship with money will build more of a stable foundation. Money isn’t something you grab for and hope you get. It’s something you can earn, have, save, and invest.
We are told to get a good education, get a high paying job, but then what? It seemed like the high paying job was all you needed. But really you need a plan, not just to make career moves. How do you best plan for the future?
According to a recent better money habits survey, it might be best to ask a millennial. Many of them witnessed their parents live through the Great Recession, or they started their careers then, and so they are extra attentive with their money. There has also been an increase in budgeting apps and free online financial tools. Millennials are quick to make the most of this information. They make smart moves like opening up 401(k) accounts as soon as they start working to maximize their employer’s matching.
Millennials, on average start saving for retirement at age 24, while Gen X do so at 30 and baby boomers at 33. Seven in 10 millennials compare their financial status with that of their peers, mainly via the often pristine and picturesque lifestyles happening on social media. While these comparisons tend to leave them feeling inferior, it does inspire them to have better money habits.
The American dream always includes owning a home. Of those with savings, nearly one-third of millennials and 41 percent of Gen Z are saving to buy a home. At any age, living in a high cost housing market makes saving for a home a huge challenge.
What do you do if you aren’t a savvy millennial? April Schneider, Head of Consumer and Small Business Products at Bank of America, says there are several steps women (but also anyone) can take in 2020 to strengthen their finances. If you want to feel more in control of your finances, she recommends that you create a budget. That begins with categorizing your purchases. Fixed expenses, such as monthly bills versus variable expenses, such as groceries and general entertainment. Once you are aware of the minimum you need for the fixed items, you can then cut corners with the variables and redirect them into saving for future goals.
Once you better understand your current financial picture, make a list of all the financial goals you want to accomplish in the short-and long-term. Your goals don’t have to be set in stone but identifying your priorities before you start planning a budget can help keep you focused and on-track.
Once you have specific goals in mind, an option is to start an investment account such as an IRA or 529 plan. It’s even helpful to have separate accounts for each long-term goal so that the money won’t get touched until the goal is met.
Not to be forgotten is your credit score which April adds is a big part of your financial identity. An excellent credit score is important for acquiring loans and getting lower interest rates. And that doesn’t only come in handy when you want to buy a home. There are times when an unexpected illness or job loss might require the need for short-term emergency funds to keep a roof over your head.
April reiterates that,
Taking steps to build financial knowledge boosts confidence, which in turn leads to positive and consistent action. This is true for women across income levels…It’s important to consider your priorities and make sure your financial goals are specific and achievable. Basically, how do you want to live your life?
Don’t be afraid to have honest financial conversations with those in your inner circle and keep learning; have an affordable portion of your paycheck automatically transferred to a savings account; start a retirement plan early; prepare for possible job losses, or long-term healthcare needs; create a plan of your life priorities and goals and revisit them often to course correct when necessary.
It’s true that financial planning changes when you get married, plan a family, or just get older. Always be ready to adjust your finances and be able to have enough to stay comfortable. Talking about money in relationships can be tough, but it’s extremely necessary to make sure you as a couple are sharing the same goals.
I like to think my dad set me up for a good wealth destiny when he opened my savings account before I was born. Even though I have had hardships, uneven employment cycles, and am working through my retirement years, I have had a great credit score throughout. I thank my dad for the good money karma he gave me and for his responsible example.
If you never had anyone look out for you, be sure to look out for yourself. It’s never too late to save your money or yourself.
Note: These tips are suggestions, but it’s always best to speak to a financial advisor about what will work best for you.