Women and Money
Whether you’re building your own business or trying to shore up your family finances, personal finance experts have some targeted advice for women. In addition to managing your own money and beefing up retirement savings, experts suggest looking for creative funding sources and learning the basics of marketing. Here are just a few tips for women:
Focus on your retirement at every age.
In general, the recommendation is that women dedicate 10 percent of their income to retirement savings, starting in their 20s. Saving 10 percent of a $50,000 salary beginning at age 25, for example, would result in $2.2 million at retirement. (That calculation assumes that investments grow at 10 percent a year, gains are re-invested and annual salary increases offset inflation.)
Pay off debt.
Debt, especially student loan debt, continues to weigh women down. After years of being considered ‘good debt,’ and something that could be easily digested in almost any portion size, millions are now struggling with student loan induced-financial indigestion. Reviewing options such a loan deferment, loan forbearance, and income-based repayment plans.
Overestimate your money needs.
Since people live longer today, particularly women, and inflation erodes the value of money, it’s important to save even more than you think you’ll need for later. Taxes and health care costs can also eat into nest eggs. The Women’s Institute for a Secure Retirement says that women, given their longevity and lower savings, may want to consider replacing 100 percent of their income during retirement to keep up their lifestyle.
Look for creative money sources.
If you have an idea for a new business or venture, stretch your startup dollars by turning to crowdfunding sources, suggests Karin Abarbanel, co-author of “Birthing the Elephant,” a startup guide for women. By self-funding or pursuing seed money through sites such as Kickstarter, Indiegogo, MoolaHoop, Plum Alley and Nap Time Startups, it’s easier to save on initial startup costs, she adds.
Women business owners can also reduce their startup costs by offering their own services in exchange for others’ expertise. Abarbanel points out that Stroller Strides founder Lisa Druxman gave workout sessions to a lawyer in exchange for getting help setting up her company. Abarbanel calls it the “brains for bucks” strategy.
Do your own marketing.
Abarbanel says many women entrepreneurs struggle with the marketing aspect of their business. “Successful launchers think of marketing as sharing rather than selling – and focus on finding cost-effective ways for getting the word out about their businesses,” she says. That means skipping advertising in favor of social media and community events.
Abarbanel says women tend to undervalue their expertise and underprice themselves compared to their male peers. “This is a serious hot button issue for women, and one where mentors, industry trade associations and resources like the Small Business Administration can be especially helpful,” she says. The same advice applies to women in traditional jobs who need to negotiate higher salaries for themselves.