Women of today face challenges in all aspects. From being how to be a loving wife to a caring mother to her children and becoming a committed worker in her job. All these are great burdens that a woman will undertake from the time she grows and matures in her life. These phases also manifest to women who are singles too.
You just know today that being a woman, you are no longer in the olden Renaissance period where women were largely dependable on their men and family for financial support. Rather, in the Liberty of Freedom from early 1960s, women had gained gender independence, including financial grounds.
Financial Independence seems like large words to many but in fact it’s a common term that you probably seen on TV commercials or magazine ads. As an women, it is necessary and important to find out what does financial independence mean? How it will impact her life as a whole if it’s not probably understood and handled as soon as possible.
Simply put, financial independence means 3 things:
- Control of own finances – you make own decisions without relying to anyone to make for you, as far as money is concerned.
- Self-support with finances – you are able to support yourself through your job, your savings, your investments, or a combination of all three. You do not require financial assistance from the government, family, friends or credit card companies.
- Basic level of financial knowledge – on managing your finances to help you make competent decisions.
No one can control what happens in life, but people with independence can control how to response with ability to the challenges and not to the mercy of chance. In other words, financially independent people can make plans for the future and all of this is especially true for women. That’s because women face a unique set of challenges that only financial independence can help overcome.
Financial Challenges for Women
For generations, many women have relied on their husbands, boyfriends, or fathers to make financial decisions. This mindset is slowly to change as more and more women gain the desire for financial independence. Just as importantly, more women are realizing the necessity of it. Whether they want to or not, most women will be forced into managing their own finances at some point in their lives.
Here are some of the reasons why:
- Longer life expectancy of women than men. They can’t just rely on their men to handle their financial decisions as the responsibility maybe thrust upon them after their loved ones are no longer around.
- Study has shown 37% of women over the age of 65 live alone, either because they are divorced, widowed, or never married. When it comes to managing money, these women usually have no one else to turn to but themselves.
- Statistics also shown that the poverty rate for women over 65 is significantly higher than it is for men of similar age.
- Lower salary for women than their male counterparts. In additions, women have to contend with the so-called ‘glass ceiling’ barrier between themselves and professional success.
- Most women make their priority to spend time and energy in raising children and taking care of the family. That means they spend less time working (part-time) and collecting an income.
- Women are often charged with taking care of their elderly relatives, which is a drain on both their time and money.
If you are a single woman, the chances are you have already assumed responsibility for your finances, or you will have to very soon.
If you are married, you should prepare yourself for the possibility that one day the burden of managing your money will fall entirely on your shoulders.
Either way, it will be best to plan ahead, to act now, to achieve financial independence on your terms than no choice. Being proactive, it will mean to helping yourself to achieve your dreams and goals. By being reactive, it means to deal with unexpected challenges, like getting out of debt, outliving your income, paying for medical expense and more.
Use the following guide to springboard to gaining your financial independence and freedom. However, as you go through these steps, remember your situation is unique and may require some alterations. Do seek financial counsel as it applies to you.
4 Broad Steps of taking your own Financial Ownership and Independence
Step 1 – understand your cash flow by diligently and consistently updating your daily and monthly income and expenses. In doing so, it will illuminate and empower you to truly understand the activity of your hard-earned money. You may use https://www.mint.com/ a secure online tool to help calculate all the sums and set budgets so that you have better control of the inflows and outflows.
Step 2 – determine your goals and set your budget by doing calculations what your goals are , such as buying a house or your target retirement fund. You may set your goal to start paying off credit card debts or saving for your 3-6 months emergency cushion.
Proceed to make a list of your savings and debt-payoff goals. As a general rule of thumb, aim for the following targets:
- Reduce debts by 20% from your monthly take-home pay
- Spend on housing not more than 30%
- Save up at least 10% (the more the better!)
After that, re-prioritize your expenditure so as to help start your saving.
Step 3 – eradicate debts such as credit cards or any other overdraft loans. It should be one of your top priorities, if not the Number 1 priority! Exorbitantly high-rate credit card debts is not the same as low-interest consolidated loan, which tends to have reasonable monthly payments and longer payoff terms.
Step 4 – earn, save, and invest! Chances are even after taking control of your cash flow and ridding yourself of debt, you will need to focus on building your wealth. This is done through combination of earning, saving and investing.
You could look at the following to beef up your wealth over time:
- Setting up Retirement Account by contributing part of your monthly salary
- Budget for Healthcare Costs in your retirement years which could include co-pays, deductibles, medication, and assisted-living services. Include this in your saving plans.
- Emergency Savings to set aside apart of your retirement account. This is fund to stash away for emergency use for any short-term usage in unexpected situations.
- Set up your Housing and Car Savings based on your budgeted goals, which will help in servicing the installments monthly.
- Explore some Saving Vehicles such as opening basic saving account, online saving account, and term deposit account.
- Putting your money work for you by Investing is one of the best ways to beat inflation and reap the benefits of compounding to grow your money in the long run. You could look into investing in stocks; bonds; mutual funds; exchange-traded funds and alternative investments such as Forex by TLC http://tlctrades.com/register?key=045b1360-1127-11ea-ad09-99ec99d11ea6 Diversification is the key to smart investing. If you are new to investing, check out at StashAway http://www.stashaway.sg/and Syfe http://www.syfe.com for more information.
Remember, almost every woman will have to become financially independent at some point whether they want it or not. By being proactive, you can achieve financial independence on your terms while simultaneously working to achieve your dreams. So don’t waste another minute. Start down the road to financial independence today!