Finance and women
Financial independence is a crucial step for women to have a stronger voice in claiming the future.
I am an avid believer that one of the keys to success for women is to get a hold of their finances. You earn your money therefore you save your money and you invest your money.
Let’s start saving money!
All women should have this precious goal, all the way from a stay-at-home mother to full time worker, of saving money.
But where to start to be financially independent? There are some basic principles:
- Bank account. Many women don’t even have their own bank account, they have a joint bank account or none. Having your own bank account is a matter of financial, a sign of ownership of your money and decisions. It’s our right.
- Credit Card. We need to walk away from many credit cards. They can be a deterrent to financial plans and savings. Avoid buying small purchases in credit card installment and run away from debts: interest is very high.
- Consolidate your debt. If you have debt in your credit card then consolidate it and try to pay all off.
- Financial planning. It’s important to have financial planning for the long and the short term. But, first of all, you need to understand your spendings and list who is financially dependent on you: kids, parents… Then, have in mind that we should always have a goal of saving 30% of the house hold income.
- Emergency fund. It is the money that we can use in difficult situations, such as unemployment or helping a sick family member.The recommendation is to save around 3 to 6 months of your salary.
- Education. Always invest in education. It’s still the safest way to social mobility and to have a brighter future. Take advantage of government programs and always strive to the top and to have a good education.
How financially stable are you? First, let’s understand some financial terms:
- When investing you need to understand that the money that you earned and saved should be treated as a precious gold since your future depend on therefore be responsible. In order to decide where to invest, you need to understand your reality. For example, I’m divorced, I have two kids, one is 10 years old and the other is 15 years old. No doubt they are a great bundle of joy in my life but also a great financial strain. I need to consider all the way from ballet, swimming classes, russian math classes to savings for college. I need to make sure I have saved enough to support my kids. In summary, I’m responsible for 80%-70% of all financial demands related to my kids. Therefore my financial burden is high and my ability to have aggressive investment decisions diminishes. How about my extended family? My extended family my parents, brother and sister are not dependent on me but I have many friends who support relatives and this is an additional strain. But, why am I saying this? Because the more people are dependent on you, the less aggressive of an investor you can be.
- Fixed income less market volatility should be a safe choice and where I put most of my investment, all the way from 50% to 100% of your savings.
- Stock market is a good decision but you need to understand what is in your portfolio. In other words, which stock options you should choose to compose a bundle of stock options which we will call your portfolio. I’m a value investor and I have invested my money on the stock market for the long run, because I usually look for long term returns.
In summary, our financial savines is often shy and even suppressed. Financial investment has been a male dominated field and we shy away from it. However, we need to claim our space and hold ourselves accountable. Your financial independence is a crucial step for women to have a stronger voice in claiming the future.
