There are a number of differences in the way that men and women manage personal finances. Ladies, let me tell you that we have a lot to do to prepare!
Women typically have longer lifespans, tend to have greater financial setbacks due to major life events, statistically have lower salaries than our male counterparts, and have different money habits.
What can we do?
I doubt there would be much argument in saying that we work very hard for our money. Yet, when it comes to spending we find it easy to waste money on things we really didn’t need or want in the first place. Think about expenses in the term of how much time you had to work to pay for that expense. Ask yourself if it was worth it. Was there another way you would rather be spending your time?
Regulating spending is one of the best ways to whip your finances into shape. Create a system of being more conscious about spending by tracking your expenses. There are several ways you can achieve this—keeping receipts, writing expenses into a notebook, or paying with checks are just a few of the examples. Choose the system that works best for you, and don’t be afraid to explore other options if your first attempt doesn’t produce the desired results.
Use the information from your spending to create a budget, spending plan, or cash flow management plan. Decide what is most important to you, and make an honest effort to spend less in other categories. Again, think about how much time you worked for those purchases! Don’t overwhelm yourself with a complicated budget; keep it super simple to increase the likelihood that it will have serious longevity. Ask yourself why you are spending on each of those things. Usually, expenses will fall into the categories of spending, purchasing, hoarding, or investing; optimally, you want to see mostly purchasing and investing.
If you need to make a purchase outside of your regular spending or budget, brainstorm ways to cover that expense. If you are considering using credit, ask yourself if you really need the item in question or if it’s something you can wait for. If you can wait, saving up for the item would reduce the cost.
Save and invest in your future. Many employers offer 401(k) programs to assist employees in securing funds for retirement. Considering females typically live 5 years longer than males, we need to make sure our retirement is funded appropriately. Contributing to a 401(k) plan is an excellent way to ensure you are putting something aside for later. Ask your employer if they have an employer-matched program; if so, try to contribute at least up to the amount they will match. They are giving free money so I highly recommend taking advantage of it.
How does this make me a Financially Fit Female?
Eleanor Blayney, Certified Financial Planner says in her book, “In my experience, the single most important factor that determines a successful retirement—and fortunately one we can control—is living within your means.” I find that to be such a powerful statement. Living within our monthly income can provide us with the power we need to fully control our financial future; this is important for all aspects of our financial future, not only retirement. The control, power, and ability gained from that alone makes for a very Financially Fit Female!
By Meghan Northcutt, AFC® Candidate, FFC Candidate
Inspired by Eleanor Blayney, CFP®’s book Women’s Worth: Finding Your Financial Confidence