Financial Tips All Independent Women Should Know
September 29, 2022 5:35 am
All women should work towards the goal of strong financial foundations so they can be safe in life, with money being used as a safety net. While money certainly doesn’t buy happiness or safety, it contributes to it greatly, and it’s a necessary component in our lives. If you’re a strong independent woman, it’s logical that you want to have strong and stable finances, and here are a few tips on how you can achieve that task that often seems impossible:
Manage your debts
It’s obvious that you want to have at least a “good” credit score, ranging anywhere around 700. All that goes between 800 and 850 is considered “excellent” and something to strive for definitely. However, it would be enough to achieve some sort of credit stability, and the most important step towards fixing your bad credit is getting rid of your debt. Firstly, focus on interest rates. These rates can quickly turn a small debt into a severe burden to your wallet. Things like 12-25% interest rates on a credit card are almost impossible to out-earn in the real market, and your debt might soon become a problem. To get rid of your debt, one solution is to switch to lower-interest loans and credit lines.
Contribute to your 401(k) plan
As early as possible, make sure to put money into your 401(k) account, especially if your employer offers a great deal. That’s basically free money, and you never turn down free money. If your work doesn’t offer a retirement plan, create your own using Roth or IRA—it’s the least you can do for your future financial stability.
Watch out for fraud
Financial fraud is one of the most common traps you can fall into, and everyone is trying to get rich on your account—some legally, some illegally. Well, you can be smart by getting informed about scams such as junk insurance. In case you live in Australia and have a credit card or loan, you might want to examine your cover. There were cases where banks and insurance houses manipulated people into paying for useless insurance and warranties, costing them thousands of dollars over the years. Luckily, there is a way to get a refund on junk insurance by working with service providers that will check your documents and request relevant documentation if fraud is detected. You can start your claim quickly and only pay if you win your money back. It’s beneficial to know about fraud and the ways to avoid it.
Get life insurance
Most young women don’t even think about life insurance, even though that’s a wrong move. Life insurance is relatively cheap (for 20-something women, it can be as low as $25 a month), yet it offers great returns in case you develop any ailments later in life. Once you get sick, it will be much harder to get life insurance and you might be forced to take out a personal loan. While life insurance is the key to financial stability, in the long run, it’s first necessary to have a solid overall financial plan in place so you can easily keep up with maintenance costs.
Have a rainy-day budget
You might have everything planned out and sorted when it comes to your finances, but life often has different plans. It’s crucial for all women to have an emergency fund that they can dive into in case of any unforeseen event. The safest solution is to set aside liquid funds in the amount of three to six months of expenses combined. This fund will be beneficial in the case of an emergency but also provide you with extra security and remove some of the stress connected to your finances. If you don’t have that money lying around (just 23% of the USA citizens have six months of emergency savings available), you can start working towards your savings slowly but surely.
Financial wellness is not something most women can only dream about. If you start with these basic tips, you can achieve stability sooner than later and enjoy the safety and security only money can provide.