Do you ever feel there was a secret money class that some people had exclusive access to and you hate that you didn’t have one? Well, I am glad to tell you you are a part of the huge population of people who wish the same.
The relationship between women and money historically has had its opinions. However, we can collectively agree that what is true is, money is a tool we can use to achieve a lot of our goals. Understanding money makes a woman ten steps closer to knowing how to have it, use it, and maintain it.
This is why we believe these are eight things women should know about money:
1. Know your money
The first step you should take to have a better relationship with money is to know it! You do this by creating a budget. If you are a woman that is on a fixed salary income or some sort of stipend or allowance. Wherever your money is coming from, you need to create a budget to know how much you usually spend a month.
This is quite easy, have a planner or a journal, write down your monthly income and start jotting down the things you always spend money on every month, from the most important to the least. This is clear enough to understand your monthly bills should come first, data service payments, rent, light, and gas bills, and groceries. Go ahead to calculate the number of times you eat out and on average how much you spend.
If you add up your monthly spending and it’s less than you earn, this is good, it means you have space for other things you could do with money. Meanwhile, if your overall spending is more than your income then you need to cut down on your spending. Move to a smaller space, and cut back on unnecessary spending like eating out. This way you are not living your life in debt.
If the pen and paper calculating is a lot, invest in an expense tracker app that is linked to your bank apps. In the case where you are sharing finances or your partner is who manages your shared accounts. Don’t give up all control, check your accounts weekly and ask for help or educate yourself if need be. The aim is to foster good relations between, women and money.
2. Have a locked savings account
Once you’ve gotten the hang of spending less than you earn, it’s time to put your extra money somewhere. , start building an emergency fund.
“Whatever you call it, having extra money in the bank for life’s unexpected expenses will get you through otherwise difficult times, giving you peace of mind that you have a financial safety net.” “We can do that,” says Tein.
Conventional wisdom says you should set aside three to six months’ worth of living expenses in an emergency fund, but ultimately you should save what you can with what you have. Even if he had $20 a week in his savings account, over time he would gain more financial independence.
“In certain situations, including pandemics, more women than men are being forced out of the labor market,” says Thein. “Keeping emergency savings on hand will help you stay financially secure and cover your expenses while you look for new opportunities.”
By saving cash, you can also avoid credit card debt. But Tayne explains that sometimes it’s better to keep money in the bank in case you need a loan.
3. Setting Goals to Ensure Financial Security
- Setting specific, focused goals today can help you achieve financial security in the future. Tayne suggests starting with saving, paying off debt, and planning for the long term.
- Make deposits into your savings account as often as possible. In general, experts recommend saving at least 20% of your gross income each month. However, the money you save will help you in the future. Consider keeping your cash in a high-yield savings account. B. Marcus by Goldman Sachs High Yield Online Savings
- Prioritize repayment of high-interest debt. Face an outstanding credit card balance and commit to paying a fixed amount each month. This maximizes your ability to save interest and has the cash to meet other financial obligations.
- Think about long-term goals ahead. Planning a child’s college education can be a long-term goal, but planning vacations or paying off a mortgage after the pandemic is over becomes more short-term milestones. Anyway, setting a timeline for each goal will help you move forward and start saving money little by little today. With these, anyone will get to know, putting women and money in the same statement is smart.
4. Compound Interest Should Be Your Friends
All personal finance books tell you to start investing early, why? because you have more time to think about compound interest. Compound interest means the interest on interest. If he invested $1,000 in one year and got a 5% return, he would have earned $50 ($1,000 x 5%). Earn another 5% next year and you’ll earn $52.50 ($1,050 x 1.05).
Compound interest means the interest on interest.
It doesn’t seem like a huge difference, but it might actually add up. Let’s say you invest $1,000 a year between the ages of 25 and 35 with a 5% return. At 35, I decided to stop investing. The $10,000 invested over the last 10 years will add up to $35,042 by the time you’re 55.
Now let’s say you decide to stop investing and wait until you’re 35. Then invest $1,000 each year with her 5% return. To get to $34,719 by age 55, she’ll need to invest twice as much as her $1,000 a year over 20 years.
5. You should build credit
It can be difficult to feel financially secure if you don’t have credit. “Lenders may decline loan applications if you have a weak credit profile or little or no credit history,” he tells Tayne.
About 45 million Americans are believed to have no credit information (no credit report) or be being assessed.
Here are some tips to get you started.
- Become an authorized user on your partner’s or relative’s existing credit card account. As an authorized user, you can piggyback on the credit behavior of others without incurring card fees. Make sure the primary account holder is responsible for their funds so they can benefit from their positive behavior.
- Open a secure credit card. A secured card, like the Discover it® Secured Credit Card, is a great option for beginners looking to build credit. A secure card differs from a traditional or non-secure credit card in that a deposit (usually $200) must be paid to obtain a line of credit. Most secure cards offer a clear path to upgrading to a non-secure card. For example, with the Discover it Secured Credit Card, Discover will automatically review your credit card account for seven months to see if we can switch to an unsecured line of credit and refund your deposit.
- Get credit to pay eligible bills. You don’t have to have a credit card to build credit. Experian Boost lets you earn credits by paying your monthly electricity and cell phone bills on time.
The free feature allows him to find eligible on-time bill payments and add those payments to his credit file by simply connecting his bank account to his Experian account. Eligible on-time payments include phone, internet, cable, utilities (gas, electricity, water), and streaming payments such as Netflix®, HBOTM, HuluTM, and Disney+TM. According to his website, the average user who received the boost reported that his FICO® score increased by 13 points.
6. Set exciting goals
Saving and investing can be boring. I mean, how excited would you be to store your money for use for 30 years?
If you’re saving for fun, get into the habit of saving.
Also if your retirement plans aren’t really about money, try setting fun goals. If you love to travel, save up for your dream vacation. If you’re looking to try out a new hobby like photography, save up for the camera you’ve been eyeing. Or, if you really need to update your closet, set a goal to save for it. If you’re saving for fun, get into the habit of saving. This won’t make retirement savings fun, but it can make it easier.
7. Don’t worry about how other people spend their money
One of the hardest things about money is understanding that everyone uses it differently. You may have friends who like to spend a fortune on fancy dinners or live in fancy homes, but that doesn’t mean you have to spend money that way.
We all have different values. One person might like to indulge in everyday luxuries, while another might prefer to save all their money to travel and see the world. That is what you should spend your money on. The sooner you align your spending with your values, the richer your life will be.
8. Know and seek your worth
Saving and investing money is very important, but sometimes you need to earn more. One of the best things you can do for your financial health as a woman is to believe in your work and learn to negotiate a fair salary. Women and money are both valuable, so why are you not seeking your valued worth? You can use an online payroll calculator to research the market value of your position, build a network of people seeking salary and career advice, and feel free to ask for more information.
Historically, women and money are not something that the world likes associating together. Therefore, we have been taught subconsciously to use money for others instead of ourselves. Creating a better relationship between women and money stems from taking that step to know and to want. With financial growth and success, there’s no faking it; only being conscious and patient will do.
Before you go…
Hey, thank you for reading this blog to the end. I hope it was helpful. Let me tell you a little bit about Nicholas Idoko Technologies. We help businesses and companies build an online presence by developing web, mobile, desktop, and blockchain applications.
As a company, we work with your budget in developing your ideas and projects beautifully and elegantly as well as participate in the growth of your business. We do a lot of freelance work in various sectors such as blockchain, booking, e-commerce, education, online games, voting, and payments. Our ability to provide the needed resources to help clients develop their software packages for their targeted audience on schedule is unmatched.
Be sure to contact us if you need our services! We are readily available.