Women face unique financial challenges. You’ll recall I mentioned the Financy Women’s Index Report yesterday, that showed women are paid 14.6% less and have 30% less superannuation savings (as at June 2018). Not only are they paid less and have less super, they may also:
- take time out of the workforce to care for others (family – kids and parents)
- work part-time rather than full-time
- not have had as much financial education as men or suffer financial abuse; and
- typically live longer (average 84.4 ABS Feb-16).
So, it’s not only important to figure out where your money is going, it’s equally important to plan your spending, saving and investing. That way you can forget money worries and enjoy living.
Here’s 10 simple steps to getting a better grasp on your finances:
- What’s important to you? Think about your goals across family, health and career. What’s your time frame – day, week, month, next birthday, 5 years, kids finishing school, etc. Write it all down in a table and add how you feel about the goal – is it realistic or unrealistic, and what’s getting in your way. It’s okay to have unrealistic goals, those are our dreams, and dreams can come true (with a little planning!).
- Where are you now? How certain is your income? What are you are spending now? What do you own and owe? Are you considering a career break or substantial purchases? When might you retire?
- Consider whether you have enough surplus after spending to support achievement of your goals and build what you own.
- Decide on a few cut-backs if needed.
- Plan your future spending by creating a budget. Write it down.
- Feed the budget into your longer term plan. Write down your longer term plan – use the questions above to help you formulate it.
- Are you on track? Use your budget and plan as tools over time to track and compare your actual spending against your budgeted spending, savings and time frame. Are your investments and superannuation growing?
- How will I stay on track? Decide how often you’ll check in with yourself based on the timeframe for goals achievement. Set up time in your diary, so you actually check in and use the time to make any adjustments. It’s okay to revise your goals as things change, and it’s also fun to reward yourself for achieving milestones.
- Once you are comfortable with the discipline, start thinking about strategies to optimize your financial future. What will happen if my income stops? Am I better off repaying debt or investing? I have a reasonable sum available, should I be investing? Is my superannuation working for me? What safeguards do I have in place if things go wrong? What if I outlive my money?
- Repeat the process.
If you need help speak to a qualified Financial Adviser who focuses on your needs and interest.