There’s no such thing as one size fits all, especially when it comes to managing your money. Though gender roles have shifted over the last forty years, an inevitable fact remains – women still do the majority of child raising and domestic work. Women are also more likely than men to take extended leave from work to do just that. That means less income over time, up to 20% less than men on average. Here are 4 ways to manage your money that are geared toward working women.
1. Set yourself a budget and save
Women aiming for future financial security need to set a budget and stick to it. Tammy May, CEO and founder of successful budgeting company MyBudget said in Samara Magazine this year, “No two budgets will be exactly the same — your financial plan needs to be based on your specific situation and goals — but there are three important money management principles that all women should adopt and carry through every phase of their lives.” If you’re planning for a baby or need a new car, you’ll need money in the bank. Likewise, we can find ourselves in and out of relationships, lose our jobs, and fall ill unexpectedly. There’s no avoiding it – if you want to savings you need to save!
2. Avoid bad debt
Debt is debt, right? Wrong! There are kinds of debt that you should want to avoid racking up. Those debts are usually found in consumer goods like clothes, shoes, holidays and putting small items on your credit card. If you have to finance it to afford it, don’t. Good debt like investing in houses or shares increase in value and eventually offset the debt.
You have to live not only within your means, but on half to three-quarters of your income.
3. Live below your means
We all learned hard lessons in the last half-decade. You can’t take your job for granted. It’s quite possible the industry you’re in won’t even exist in the next ten years. You have to live not only within your means, but on half to three-quarters of your income. This gives you a buffer in case there are changes in your income, and you can easily adjust. It’s just another variation on “short term pain, long term gain.”
4. Change to a more flexible or higher-return super fund
Did you know one-third of the female workforce works part-time or casually? This means women are putting less away into superannuation compared to men. If you’ve had lots of part-time or even full-time jobs, you may have superannuation spread about different accounts. There’s $18 million worth of unclaimed lost super out there, but you have to find it. AUSFund has an unclaimed super tool that can help you. When you’ve got all your super together, you should roll it over into to a low-fee, higher-return super fund. If you have a mortgage, set up a redraw or interest offset facility and redirect the funds into your super.
photo credit: wajakemek | rashdanothman
Bill Tsouvalas is founder and managing director at www.badcreditcarloans.com.au. He has been working in the vehicle & asset finance business for over 8 years. He also writes car reviews and articles on car finance, chattel mortgage, insurance, consumer protection and insurance related topics.