With today’s ever-growing demands and necessities, women can easily blow their budget with never-ending household needs, family’s daily consumption, children’s education funds, and personal expenses.
Whether you’re a career woman or a stay-at-home mom, personal finance experts share a couple of targeted advice for women to help you overcome financial obstacles, save up for that grand family vacation, or grow your business. Aside from managing your funds and boosting your retirement savings, here are other creative wealth building tips that women like you can follow to improve your financial health.
1. Take control of your money.
One of the common mistakes many women make is letting their spouses or partners manage their money and the family’s entire financial resources. Then, if a divorce or death happens later in life, and they end up being single, they wouldn’t be in a good position to deal with financial challenges. Therefore, financial planner and book author Kathleen Grace recommends that women should manage their own money and continue to take control of it at every stage of their life.
2. Look for earning opportunities.
Be in constant search of earning opportunities. Do not settle with a single revenue stream or with what your husband is giving you on a monthly basis. This way, if things get too tight or in cases of family emergencies, you have something to spare.
If you can create passive income by running your own business or making investments that let you earn without physically working, you can make better use of your time looking after your family and managing your home. Personal finance author Barbara Stanny encourages women to “shift” their thinking and say “yes” to more lucrative opportunities out there, like a new speaking gig that can let them earn extra.
3. Plan your retirement early on.
Manisha Thakor, co-author of “On My Own Two Feet,” recommends that women should think about their retirement savings starting in their 20s. A good example is saving 10% of a Php 50,000 salary at the age of 25 which would yield Php 2.2 million upon retirement versus saving up in your late 40s.
Note that the calculation above assumes that investments grow at 10% annually, gains are reinvested and annual salary increases offset inflation.
4. Get out of debt.
Debts are tricky. The longer you have it, the bigger it gets. Thakor emphasizes that debt continues to weigh women down.
So one of the most important wealth building tips in our list is, if you owe any money to anyone, make sure to pay it off as soon as possible. Thakor suggests looking at options that will help you manage your debt fast, including loan deferment, loan forbearance and income-based repayment plans.
5. Build more savings.
While most women keep some sort of savings, either a safety deposit box at home or an account in the bank, one savings account may not be enough. Instead, women should build three sources of money, including (a) individual or personal savings, (b) emergency funds, and (c) retirement savings plans.
Because many women take time off from work to give birth or take care of the family, their emergency funds and retirement savings tend to suffer — or at least tend to be less than their husband’s. Thus, it is important that you store up additional dough for these necessities.
6. Plan ahead.
While “seize the moment” and “live one day at a time” are meaningful pieces of advice, they may not help you succeed financially. Considering the growing demands of each individual in your household and the inflation of your money’s worth, it’s really important to save even more than you think you’ll need for later. Keep in mind that taxes and health care expenses can also blow your budget fast. Thus, make sure that you have something to replace your income during retirement to keep up your lifestyle. This is one of the crucial wealth building tips you need to keep in mind.
7. Think of funding sources creatively.
Income doesn’t come from corporate jobs alone. If you have a good and feasible idea for a business venture, you may want to stretch the value of your start-up dollars’ worth by trying out crowdfunding sources. This idea came from Karin Abarbanel, co-author of a startup guide for women called “Birthing the Elephant”.
8. Offer ex-deals.
Planning to start your own business and work from home? Save on startup costs by offering your own service in exchange for another service. If you are a web writer, for example, and you need a decent company website, tap a web designer who can build you a website. But instead of paying cash, make a deal to provide him a month’s worth of new and fresh blog articles for his own website. Abarbanel calls this the “brains for bucks” strategy where both parties are in a win-win situation.
9. Charge more.
Abarbanel says women tend to undervalue their expertise and underprice themselves compared to their male peers. The same advice applies to women in traditional corporate jobs who tend to accept offers lower than their expectations. Since you know yourself better than anyone else, you need to know your worth and never settle for anything less than you deserve.
10. Be open to your partner about financial issues.
According to Thakor, it is common for women to keep money secrets from their husbands or partners, such as overspending problems or credit card debts. She suggests being open about money matters and talking about them often in a relationship.
It’s never too late to build your wealth for yourself or your family. As long as you’re committed to improve your future and create the life you’ve always wanted, following these wealth building tips for women should be a piece of cake!