SUMMARY: 90% of women will be solely responsible for their finances at some point in their life. So how do they overcome any challenges and pursue financial independence? Here are our tips:
For many women, working toward financial independence is more difficult. Obstacles women face include having a longer life expectancy than men which will require more savings for retirement, spending fewer years in the workforce than their male counterparts, and taking leave more often to deal with family matters. On top of all this, many women still struggle with the gender wage gap where they will often make less than men for performing the same type of work. So how do women overcome these challenges and pursue financial independence? Below are a few tips to help get started.
Determine Financial Goals and Develop a Budget to Work Towards Them
This first tip may seem easy, yet many people fail to properly budget their money and find themselves unsure of where all of their hard-earned dollars have been spent. Start the budget with the basic needs that are required to survive, such as rent and mortgage, utilities, food, medical, and clothing expenses.
Next, write out some financial goals and determine the amount needed to save each month to address those goals in the time frame allotted. If the budget ends with a deficit, find other streams of revenue, or determine areas where expenses may be cut back.
Contribute to a Retirement Plan
Even if a spouse contributes to their employer-sponsored retirement plan, contribute as well. It is important to contribute to both retirement plans to better grow your retirement nest egg and to prevent problems in the event of a divorce. If possible, contribute up to the percentage that your employer will match to get the most out of your plan.
Pay Down Debt, Then Keep It at Bay
One of the biggest hindrances to financial independence is debt. Not only will it cost a significant amount of interest over time, but it also creates difficulty in the event of job loss or pay reduction. Start by tackling the smallest amount first and then roll that payment into payment on the next one once the first has been paid.
With proper savings, debt management, and defined financial goals you can become more financially independent and better prepared for retirement.
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