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Women & Money

Here are some daunting statistics regarding women and money:

*Fewer than two in 10 women feel “very prepared” to make wise financial decisions. Half indicate that they “need some help,” and one-third feel that they “need a lot of help.” (Financial Experience & Behaviors Among Women 2010-2011 Prudential Research Study)

*They number of middle and upper income women struggling with debt has risen faster than the number of lower income women struggling with debt. (Women, Debt and Recession, CareOne Debt Relief Services)

Every woman has the potential to take control of her finances when she is equipped with the knowledge that she needs to make practical decisions regarding her financial future.  Here are a few basic tips for successful financial planning:

Create a Budget that You Can Live With
A basic budget consists of allocating a percentage of your gross income to categories that support your lifestyle.  While these categories can be different from person to person, the most basic categories are (with the percentages of your GI that many experts suggest you allocate to each):

Housing(35%)- includes mortgages/rent, utilities, home insurance & maintenance
Transportation(20%)- includes car payments, car insurance, maintenance, & gas
Debt(15%)- includes student loans, credit cards & personal loans,
Other(20%)- includes all other expenses such as food, clothing, entertainment and charity
Savings(10%)- at least 10% of you yearly income- pay yourself first!

*Here are a few of the sites that are well-designed and user-friendly that can assist you in budget planning: www.mint.com, www.Budgettracker.com, www.quicken.com, and www.money.strands.com.

Learn the Debt Do’s and Don’ts
In short, do break bad debt habits and don’t live above your means.  Don’t abuse credit and do practice delayed gratification and using cash instead, as much as possible.

 Save for a Rainy Day…& More
Rainy day funds should include more than just planning for emergencies, but should also include retirement planning, short-term goals and planning for your children’s education (if that applies to you). Emergency funds should include at least 3-6 months of living expenses in a safe account (i.e. bank account or CD’s). Savings for short-term goals, retirement and education should be saved in accounts that yield higher returns and a level of risk that fits your time frame for saving.  Starting early makes a huge difference.

 Plan for Tomorrow
When you’re married, you may depend on your spouse’s income to help pay the mortgage and other living expenses.  No one wants to think about tragedy or loss, but you should discuss with your spouse a game plan if something unexpected should happen.  While nothing can replace a spouse, a term life insurance policy protects your family if something should happen. 

 The basic concepts of money management aren’t obscure or difficult to understand.  Whatever your financial situation, it’s important to get started today.  If you put together a simple plan and follow it, you’ll be amazed at the progress you can make.
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Yolanda Johnson is a DC elementary school teacher and an independent financial representative for Primerica Financial Services. She earned her business degree from Florida A&M University and is currently completing her M.Ed at Lesley University (Boston, Massachusetts). Yolanda is passionate about education and serving the financial and income protection needs of individuals and families. For additional resources from Yolanda, visit www.facebook.com/pfsyolandajohnson