Financial planning is all about empowering yourself to make informed decisions regarding your finances and future. But unfortunately, many women feel they don’t know enough about finances to actively plan financially.
Plus, a married woman with children to raise will be more likely to let her husband handle those critical money decisions.
And yet, on average, women tend to live longer than men. This means they need to plan for a longer retirement while dealing with a gender pay gap that often leaves them underpaid compared to men doing the same jobs.
The good news is that it’s never too late to empower yourself. These seven tips will show you how to get started with financial planning for women.
- Learn about financial literacy
Financial literacy is not just about learning how to build an investment portfolio. If you have no idea how to make a budget, save money to make your dreams come true, or plan for retirement, you need to educate yourself about financial literacy.
This will equip you with the financial knowledge and skills you need to take control of your finances and increase your quality of life. Of course, you could read about different financial topics. You could also speak with an advisor, who will help you with retirement planning.
- Be involved with your finances even if you have a partner
If you share your finances with a spouse or partner, letting them handle everything without getting involved would be a mistake. If your partner has more financial literacy than you do, you should learn from them instead of letting them manage everything.
Even if you want them to pay the bills, you should still insist on seeing those bills. You should also check into your bank accounts to review them. If your life situation changes and you end up alone, you will not be completely unprepared for financial planning.
- Find a financial advisor you can trust
If you can’t rely on your partner to help you learn about financial literacy, seek a financial advisor. You might even be able to find one who specializes in financial planning for women. This person will be able to provide you with invaluable advice.
Look for a financial advisor you feel comfortable with, and be sure they understand your situation, concerns, and goals.
This is how they can help you take control of your finances and plan for your future.
- Be clear about the results you want to achieve
Financial planning is a long-term process. If you want to reach your goals, you first have to know what they are.
Ask yourself what matters most to you, what you want to achieve, and what kind of life you intend to lead, now and in the future. Of course, you will want to be financially secure, ready to face unexpected events and save enough money for a comfortable retirement.
Decide on short-term and long-term goals, and ask your financial advisor how to achieve them.
- Save money for an emergency fund
You should save for one now if you don’t have an emergency fund. Even saving a few dollars each week is a worthwhile start.
The money you save in your emergency fund will be there whenever you face unexpected expenses. You should save at least three months’ worth of living expenses, which will significantly help if you ever lose your source of income for some time.
Using your emergency fund to respond to an emergency feels more satisfying than using retirement money.
- Focus on paying down your debt at the highest interest
Once you have saved enough money for your emergency fund, you must focus on paying down your debt at the highest interest. This will probably be credit card debt. And when you have paid down this debt, you should focus on the next debt with the highest interest.
Paying down your debt and staying debt-free is another step you can take toward effective financial planning.
- Build a good credit history
Some types of debt are not necessarily unwise to have. Getting a mortgage, for example, is often the only way to own a house. And if you hope to get a loan for a major purchase, you must have an excellent credit history.
Remember that you need good credit in your name, not your partner’s. One easy way to build your credit history is to pay all your bills on time, including your credit card bills.
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