Guest Post by Gloria Martinez, www.womenled.org
Making effective decisions with your financial resources will help you achieve your goals and attain the life you want. Unfortunately, research shows that women feel less financially secure than they did a few years ago, and most would like to improve their financial literacy to gain greater confidence in this area. Understanding how to save, invest, and manage debt will get you far. Here are some tips to help you boost your financial literacy today!
Plan for the Unexpected
An unexpected event, whether it be a job layoff, a sudden illness, or a death in the family, can throw a huge wrench in your financial plans. Understanding how these kinds of setbacks can affect you—and taking steps to prepare for them—will help you keep your finances on track and protect your loved ones from financial hardship. One way to future-proof your family’s finances is to get insurance!
Burial insurance, for example, will help your loved ones cover funeral costs and any other expenses you leave behind if you happen to pass away unexpectedly. Since burial insurance premiums are more affordable than those of traditional life insurance, this can be a great option for women who don’t have dependents and only need a small amount of coverage for their final expenses.
Set Financial Goals
If you don’t have financial goals, what are you working toward? Setting financial goals will help you make decisions that lead you where you want to be. It’s a good idea to set a variety of short-term, mid-term, and long-term goals that will drive your spending and saving behaviors. For example, a long-term goal may involve buying a home or saving for retirement. Set SMART goals that are specific, measurable, achievable, realistic, and time-bound. This will help you determine the exact steps you need to reach each goal.
Practice Budgeting
One of the most essential elements of financial planning is understanding how much you spend. Unless you’re tracking your spending and budgeting your monthly expenses, you risk spending more than you earn and hurting your ability to pay off debt and save for the future. According to Business Insider, carrying a credit card balance and budgeting based on your pre-tax salary are two signs that you may be spending more than you can afford.
Creating a budget is the easiest way to find out how much you’re spending every month. This will also help you cut back on any expenses that are getting in the way of your goals! Remember, your budget should include room for making savings contributions and investing for the future as well. If you need to shave some dollars off your spending habits, make cuts to nonessential expenses like entertainment and dining out.
Pay Down Debts
Being financially literate also involves understanding how debt will impact your savings abilities, credit score, and your future opportunities. Managing debt is key to putting your hard-earned money toward those financial goals. Unfortunately, USA Today reports that women carry more debt than men on average.
Climbing out of debt can be tough, so it’s important to make a solid pay-off plan. Typically, it’s good to start by paying off balances with the highest interest rates, like your credit cards or student loans. Keep in mind that you should also focus on increasing your earning power. Women are far less likely than men to ask for a pay raise at work, but you can beat this statistic right now by realizing your value and requesting the pay you deserve. If you can’t get a raise for whatever reason, you may want to pick up a temporary side hustle to bring in some extra cash until you can get your debt under control.
It’s easy for women to feel a sense of hopelessness when they hear about gender-related economic inequalities, but it’s important not to let this hold you back. You have just as much potential to enjoy financial success as anyone else! Improving your financial literacy and understanding the intricacies of saving, investing, paying off debt, and planning for the future will help make your goals a reality.
If you need assistance please reach out to me directly or contact a fee-only Registered Financial Consultant. To join our email newsletter and obtain a PDF on financial planning fill out the form below.