01 Mar Money management for the financially savvy woman
For Savings Month and Women’s Month, I partnered with Game to collect and answer some of your pressing personal finance questions. We shot 3 videos in which I answered 6 questions that are frequently asked around the topic of money and you can watch them all HERE
- How to save for retirement
- How to pay off debt
- How to start saving and stop spending everything
- How to invest in a TFSA
- How to prioritise big purchases
- How do I start saving for retirement?
What are some key things women should do to be financially savvy?
- She does not live a champagne lifestyle on a beer budget/ She is content living within her means.
A financially savvy woman will not fund an expensive lifestyle with credit. She is content living within her means at all times whilst she works towards her goals.
She understands that true financial freedom is worth the sacrifice. She does not support an expensive lifestyle through debt. She earns her money, invests it and only then does she live it up!
Having money and building wealth creates a sense of peace while living beyond your means is a sure way to cause you stress. Give yourself peace of mind this Woman’s month by resolving to work towards financial success.
- She budgets well in advance
Remember, a budget is something written down on paper or on some excel spreadsheet – you need to see it; a budget is not just a mental note you make of where your money is going!
A survey done by Game showed that 71% of respondents consider themselves financially savvy, and 77% have a detailed budget in place that carefully tracks income and expenditure. Despite this, 50% of women confirmed that they are in debt, and very few are consulting with a professional in this regard.
A financially savvy woman budgets even 3-6 months ahead.
Yes, you read that right! 3-6 months in advance. Why? Because there are birthday celebrations, anniversaries, school excursions and holidays etc. throughout the year that you need to budget for. Think about it, for businesses to thrive and meet their cash-flow needs, they forecast (budget) their expenditure well ahead of time, and so should you. Off course the budget won’t be spot on with the numbers but it will give you a good sense of what you should plan for financially.
One of the most expensive line items in a household budget is the grocery bill, it can be tricky keeping it under control but there are a few things that you can do to curb unnecessary spending. One, write the grocery list down, doing this will help you be aware of what you need instead of just buying from the top of your head, which in most cases, you end up buying even those things that you do not need. Another way to control your grocery bill is to shop in bulk for non-perishables. When it comes to grocery shopping, you can simply save by looking at where you shop and how you shop – like shopping at Game, they normally have a lot of sales and discounts.
- She has a solid plan to get out of debt
Debt takes away money that you could be saving and investing. Credit card debt, overdraft debt and personal loans are expensive; the interest rate charged on these are often very high.
A financially savvy woman know exactly how much debt she is carrying and makes a solid plan to get out of debt and stay debt-free. She has identified how she will pay extra towards her debts so she can pay it off quicker. And because she has a plan in place, she knows exactly when the debt will be paid off.
- She invests time to learn about personal finance
I say it all the time, for you to become more confident when it comes to money, you have to educate yourself. You cannot leave your financial education to chance or to your partner. It is so empowering to approach a financial institution well equipped with knowledge than to depend on them to give you the right information.
I cannot say it enough. Educate yourself, educate yourself, and educate yourself! Doing this will help you ask the right questions and therefore get the right answers and solutions to your money pain-points.
- She formulates a plan to build her wealth
According to a survey done by Game (Download Survey Infographic), the majority of women consider themselves financially savvy but it is interesting to see that only 16% are consulting with a professional in terms of managing their finances.
In my experience, this happens for two reasons:
Firstly, women often assume they need a lot of money in order to access a financial planner; this is not true as most financial planners do not carry an upfront cost.
Secondly, women often feel overwhelmed by all the jargon involved personal finance, that is why I mentioned earlier, it is important for women to educate themselves on personal finance matters in order to understand how financial planning can help them in working toward their goals.
While it is important to manage the household budget and is equally or even more important for women to invest for their future. A financially savvy woman knows that she needs to save for her short-term goals and invest for her long-term dreams and goals.
A financially savvy woman knows her Net Worth (Assets – Liabilities) and works diligently to increase it through the following:
- Has a budget and sticks to it
- She has a plan to eliminate debt
- Does not ignore saving for retirement because it looks like it’s far off
- Has an emergency fund
- She has set financial success as a goal
- She has both short-term savings and long-term investments
From the survey, it was interesting to see that of the 1608 respondents, 37% of the women said they hide some of their saving accounts from their partner while 23% of men said they do the same. This doesn’t necessarily have to be seen as a bad thing. After budgeting for the essentials together and covering all your bills as a couple, separate saving accounts can give each party some breathing space to save how they see fit and give each person the independence required in the relationship.
Tribe, how do you stay on top of your finances? Looking at the infographic below by Game, which points ring true for your money right now?