BY KAREN JAMES
Women should value budgeting, investing, frugality and remain mindful of their spending habits, in order to take charge of their personal finances—————–by KAREN JAMES
How women think about money affects their ability to spend it, earn it while demanding to be paid fairly in comparison to their male counterparts. This affects income during working years and position in life upon retirement.
Women should be in control of their financial destinies and never be afraid to do so. Most women are more comfortable dealing with day-to-day money and the tangible things it can be used for, than longer terms financial investments that seems to exist only on an annual statement. The majority of women list providing for the day-to-day needs of their family as their top money priority, then providing for their children’s educational costs, having a comfortable retirement, living life to the fullest and saving for a holiday. Having a comfortable retirement is higher up among women’s money priorities, but as most women would know they face some unique challenge to building an adequate retirement package for themselves.
Women still face unique challenges when it comes to money, but can empower themselves to control their future. Equality is great, but when it comes to financial planning, women face different and unique challenges. People do have the same financial goals to save and invest wisely like planning to finance a child’s education without sacrificing dreams of holidaying at a choice location let’s say an exquisite serene environment of a five-star hotel with their partner.
Women should confront the reality of living longer with less money. The bottom line Is that women’s lives vary significantly from those of their husbands, sons and brothers. They live longer most times yet earn less amount of money because their work lives are interrupted by prolonged periods spent caring for others, young children, aging parents or both. That interrupts their career path and its one reason women are more likely to have jobs that offer more flexibility but lower salaries.
Women needs to think about investing differently than men and needs to plan their finances well ahead of spending to minimize any shortfall. It is never too late to start managing your personal finances. In order to gain control over your finances, you have to have a clear objective and knowledge about management of finances that involves money management of personal funds through creating of budget, understanding your expenses and income, consolidating your debts by slashing or removing unnecessary expenses, creating an emergency fund as well as saving 10 to 15 percent of your income for retirement. If you are not doing this then it means that your money management skills may need an overhaul. Learning how to manage your finances effectively can help you from running into debts.
Bad money management by women sounds nasty and you probably want nothing to do with it.
A good portion of women don’t properly manage their money. Some women are pretty bad finance managers, yet there is hope for you if you find yourself among this group.
Having a sound money management plan can be the light at the end of the tunnel for women trying to get their financial life in order. Managing your money like anything takes time to understand and to improve on. To master, it also takes commitment and a solid understanding of your financial situation. These are the first steps in effective money management. Anyone who ever took control of their finances went through this and getting your financial life in order, sooner rather than later is of utmost importance.
Here are some actions that you can do to make life simple and manage your money the right way;
CREATE A BUDGET: first, create a budget if you haven’t already. Is it necessary? Trust me you need one. Creating and sticking to a budget might see a little tough to achieve at first but it pays off in the end. Budgeting helps us see with clarity and full transparency our financial situation and this is of most importance for better managing your money. It’s the first step to help us pay off debts and start saving for future expenses like mortgage, a car and your retirement if you are a working-class lady. It’s what will bring balance to your financial life and give you peace of mind. To begin, you will need to understand your own income and your expenses to better manage your money. This is addressed in the following two steps
UNDERSTAND YOUR EXPENSES; Ask anyone off the top of their head to tell you how much they spend monthly on anything and they might not be able to do so. This isn’t rare, many people actually don’t know the total amount of expenses they generate on any given month. This is a problem but there is an easy solution for it. For one month, keep track of all your expenses, your transportation fare, utilities, airtime recharges, restaurant bills, clothes and hairdo bills, TV subscription, everything and look at your bank statements, then add up all your expenses. Remember to keep track of expenses paid by cash as well as credit cards if available. The idea is to have all your expenses accounted for to get a total amount. This will allow you to see the whole picture and know how to manage your expenses going forward. You may also want to compare your historical performance over time.
- UNDERSTAND YOUR INCOME; when you ask people how much they make a month, although they probably won’t tell you, internally they know. This is the difference between income and expenses, most people know their full monthly income but have less knowledge of their full monthly expenses. The point is to figure out your total expenses and subtract that from your total income for the month in question. If you end up with a negative number, it means you spent more than you made. Reduce your spending and expenses. If you end up with a positive number, this is good, it means you spend less you made. With this you could increase your debt payments or increase your savings. Once you understand your expenses and income and have a firm understanding of the money coming in and out of your life, it’s time to take some additional steps to best manage your money.
- CONSOLIDATE YOUR DEBTS: Debt, the dreaded word. No one likes debt and most people that need help managing money actually need help getting out of debt. The first thing to do is to get it under control and work on getting rid of it. If you have student loans, cooperative society debt, microfinance bank loans and other debts, look to consolidate them and try to get the lowest interest rate possible. Again, it’s all about taking the proper steps to control your money. Once you come across more money, try offsetting your debts to be free and be prepared for future investment.
- SLASH NEEDLESS EXPENSES: Big fan of fast foods? Curry rice and tasty fried chicken? Roasted fish with salad? Ice cream bowls? Consider if you are buying any of these every day, as delicious as they are, in hundreds out of your wallet, multiply that out and you could be spending thousands every week on that alone. Maybe, just maybe, consider making your own mouth tasty foods at home to pinch those pennies.
Paying for a gym membership but you can joggle around and do yoga in your backyard? Cancel it. Think long and hard of other subscriptions, social memberships and accounts you are paying for but could live without. Remember, the idea is to learn how to manage your finances better by taking everything and every kobo into account. So, do some slash expenses wherever you see an opportunity to do so.
CREATE AN EMERGENCY FUNDS: Sometimes the unexpected happens and it’s good to be prepared. Emergency funds are important part of a healthy personal finance plan. In almost all cases, you shouldn’t touch or take money out of the funds, rather let it sit there earning interest. If you lose your job or an unfortunate or unexpected expenses arises like fire disaster, health emergency, rain storm or flood water damages occurring, this is when you should tap into it.
SAVE FOR THE RAINY DAY,10-15% FOR RETIREMENT:
You must not be a working-class lady before you save for retirement. A business owner or a petty trader can also save for her golden years, if you don’t want to be at the mercy of others when old age calls. I know it’s far off, but if you want to be sipping blended fruit juice at five-star resorts across the globe under a sun umbrella or at a beach side rendezvous in a serene environment and be at peace with your soul, then start saving for retirement. The sooner you start, the better off you will be in your golden years. First thing should be to establish a savings target, one that tells you approximately how much you should set aside over time to meet your retirement goals that will allow you to live the sort of lifestyle you envision.
Ladies, being able to effectively manage your money will make life flow much more smoothly, not to mention help lower your stress levels.
Girls, being well organized will also save you time and save you potential headaches in the future and no one wants those.
So, get out there and take the first step, mapping out your personal financial strategy with the ever-present goal in mind of being able to manage your finances better than before. Many others have done it and so can you. Think of how money made earlier can be useful at old age, you can afford practically anything you want without being at the mercy of others.
So, girls, your fund is already in your wallet, you just don’t want to have them because you already made them.
