I love supporting women to pursue the best version of themselves. I want to share resources and tips to help you achieve your ideal lifestyle.
If you’re a woman who’s just out of college, you might wonder what you need to do to become independent. You need to take several steps to become fully self-sufficient – it won’t happen overnight, but if you work on each of these steps regularly, you’ll create financial independence for yourself. The steps you need to take are:
Emergency funds are separate accounts set aside for unexpected expenses. The money cannot be part of your retirement fund or the savings plan you use for a new vehicle, vacation, or house. Instead, it’s a backup plan, to be used in case of emergency only.
Your emergency fund’s size will depend on your habits, economic situation, and dependents, but a general guideline is to set aside enough to cover three to six months of living expenses. At first, this amount may seem daunting, but you should save a little each week or two to build up to it.
Depending on your bills, family needs, and job stability, you may need to adjust the amount. Invest the money in a bank account that you can access easily without penalty or taxation, like a money market account.
If you need to access emergency funds quickly, your stocks, mutual funds, or other assets may depreciate. Start rebuilding it immediately when you withdraw money from the account. The next time you have an emergency, you will be able to meet your needs if you start saving now.
Maybe someday you want to buy or build a house you can incorporate french design into. That’s probably going to cost some money. That means you’ll have to improve your spending habits if you want to save more.
To become financially independent, women can reduce their debt – pay off high-interest credit cards and try to limit credit card usage. This will take some financial planning, but will be worth it.
Some debts, like mortgages, aren’t bad, but other types of debt should be minimized. Once you’ve done that, find other places to reduce your spending. Start bringing your lunch to work instead of eating out every day and look for opportunities to save at the grocery store and at other stores you shop at regularly. Limit department store shopping, but if you must buy something at a department store, try to buy it when it’s on sale.
Even when you’re a strong, independent woman, sometimes you’ll need financial advice. A good place to go is to a financially savvy friend or family member if you have one. They may be able to give you some advice on what to do to start building some savings if you’re not already sure.
If you don’t have a financially savvy friend or family member, the next best place to go is your local bank – they may be able to recommend accounts that fit your financial goals.
If you work full-time, your employer probably offers a 401(k)-retirement plan. If they do, find out if they offer a match. If they do, meet your employer’s match by contributing an equal amount of your pay. The amount you contribute to your 401(k) every paycheck lowers your taxable income.
If you’re self-employed or your company doesn’t offer a 401(k)-retirement plan, the best way to save for retirement is to open a traditional IRA. You can contribute up to $6,000 a year to a Traditional IRA tax-free, or $7,000 if you are 50 or older by the end of the year. If you have children, another tax-free
Yes, investing in the stock market can be risky, but if you understand how it works and up with how your investments are performing, you can mitigate that risk.
A few tips to be successful with investing in the stock market are to invest for the long term, invest in companies that pay dividends to their stockholders quarterly, so you make more money on your stocks, and reinvest the dividends to continue growing your investment portfolio.
For example, if visiting Paris is one of your financial goals, you’ll need to figure out how much it would cost to fly there, how much hotels cost, and see if you can find travel packages for Europe or France. You might also decide to use money as a tool to achieve your purpose.
When you go to school, you’ll take classes that prepare you for your chosen career. One thing you won’t learn is financial literacy. That’s where a good financial education comes in. Women can benefit from a good financial education to take charge of their finances and spend habits to have more money than their male counterparts, and better financial security.
Even if you’re not majoring in finance, take finance-related courses. These courses will help you make better financial decisions and improve your financial life. A report by Kimberly Blanton of the Financial Security Project said that the first challenge graduates have after graduating from college is getting a handle on student loan debt. The idea of “quis bono” or who benefits from education has been discussed in the past – when it comes to financial education, women can benefit because when they take control of their finances, they can take control of their lives.
Those are a few personal finance tips for women who want to become independent. If you follow these tips, you’ll eventually create financial independence yourself. That will give you the freedom to pursue your dreams, so you don’t have to rely on a man or anyone else for support. Once you know what you need to do to become independent, decide what your first step should be, and take it.