As more women strive to create a pathway for independence and empowerment, one of the must-have tools is a proper guide to building wealth and attaining financial security.
While significant strides have been made to ensure women’s independence, financial security is still a big issue, and not many of them own enough wealth in their lifetime.
Notably, over 40% of women globally lack financial literacy and are currently going through a situation that could be solved by having some financial plan.
When it comes to long-term plans, women are also more likely to lag in saving for retirement than men. These gaps and current financial revelation underscore the need for every woman to have a simplified, tailored and realistic financial plan. Ideally, the plan should begin with the basics, like expenditure monitoring and savings, and cover the financial disciplines related to investing.
Women excel at what they do, like careers, and are good at multitasking, so enforcing a guide for planning for the future shouldn’t be a big challenge. Anyway, for beginners, this article shares everything you need to know and actionable steps to help with wealth accumulation.
Contents
Financial Security from a Woman’s Perspective
Regardless of the circumstances, a woman should always be prepared to handle financial issues without hardships. This is better said than done because so many women struggle financially. However, once you master the art of financial security, things should be okay.
Below are different ways you can ensure your financial security
1. Opt for Financial Planning Help
To begin with, you need to know more about financial planning. Without literacy, experience and proper tools, your plans may not work effectively. That is why you need help from financial planning experts to help you imagine every situation and enforce a strategy to ensure you have funds to get you through.
To begin with, they can help you with longer-term planning for events like retirement and wealth building. Instead of letting you go through all the challenges alone, they can advise you on retirement account management and plans to minimize taxes and daily expenses.
Furthermore, they tailor the strategies as per your needs. For instance, if you are a Christian woman, they can offer you specific Christian women financial planning strategies.
2. Debt Management
The second aspect of financial security for a woman is debt management. Unlike men, women are sometimes likely to take more debt to care for needs like lifestyle matters. Also, most have pressing needs, emergencies and home obligations, especially single mothers. These circumstances make debt a part and parcel of life. If you are not careful, the debts can burden you and affect your entire life. The goal should be to monitor them and ensure they are low by utilizing the best management strategy, like prioritization, to limit the debt burden on your life.
3. Insurance for Critical Needs
America is more exposed to risks that can easily harm you financially. So, you need insurance to safeguard you and protect you from out-of-pocket payments, which can be hefty. Besides the basics like home, car, and health insurance, there is more coverage, especially for risks that may occur in the future.
You need life insurance as collateral in case you need debt, education insurance for college funding, and property insurance, especially if you have jewelry in your home. All these types of insurers will help you address all the risks and build your wealth for the future. For example, taking education insurance when the kids are still young saves you from the burden of paying college fees while you plan to retire.
4. Emergency Planning
Women’s resilience is best measured by how well they manage emergencies, especially money-related ones. Your financial security handbook must always cater to emergencies and ensure you are ready. In the past, piggy banking was a good way to plan emergencies. However, that may not work well today.
So, you can always create an emergency fund account with a different bank. However, financial gurus advise you not to create a savings account for emergencies. Instead, you should use a money market or other investment accounts to grow your emergency capital. Ensure the account is highly liquid to enable you to get instant cash to deal with the emergency.
Your Perfect Budget
Having the best budgeting principles is the key to executing your financial planning. The 50/30/20 rule may work for you. However, you should be more adaptable and ensure the budget is tailored to your needs since everyone experiences different situations.
So, while you plan to spend 50% on necessities, 30% on wants and 20% on savings and debts, you should make a few sacrifices. For instance, this is not the perfect plan for someone who lives from paycheck to paycheck. In such a situation, you can tweak things by reducing your wants. You can forgo the entrainment and travels to help build your 401k.
Building Wealth
You should not work hard for all those years and end up with limited funds or push retirement forward. Ideally, the end of retirement should be the beginning of a new business venture where you are the leader. It is only possible if you think of the long term.
So, you can prepare by having some side hustles based on your hobbies. The funds from side hustle can be redirected to boost your retirement plan. Another potential for long-term wealth is real estate. This is the one investment that never fails. If you can afford large land, build a couple of houses to rent or sell. If not, invest in the stocks of known and big real estate businesses.
Diversify your investment to build a portfolio of low and higher risks. Try to balance both to ensure you do not suffer significant losses during an economic downturn or some industry changes or news.
Bottomline
Everything discussed seems like a perfect and easy plan; however, you should know the obstacles. You can greatly improve your financial health by adapting all these plans to your current situation and relying on financial planners to help.
The best strategy is to keep learning and sometimes be open to risk-taking to help you constantly surpass your goals.
Rylee