Are you clued up on your family finances?
Women are the drivers of the economy and have been for some time now. Women are the consumers, the decision makers. They are the ones making a change in your community and yet not enough women are taking control of their finances.
It amazes me when I hear women say that their partners look after the bills, the mortgage, the holiday planning.
It’s astonishing (and scary) that a husband can hide from his wife the fact that they don’t even own the house they live but have been renting for a decade and she’s none the wiser.
Or when another couldn’t tell you what interest rate the credit card has or how many assets are in her name or how they are split.
Or that one doesn’t have her own savings account. I can’t imagine having to ask my husband for money to buy tampons or to be able to pay my own way at dinner.
It is always in your best interest to know the status of your finances and to have some of your own.
Knowledge is power.
That’s why it’s so awesome to see so many female bloggers in the personal finance sphere. You are rocking it. You are taking control of your life. Sometimes even becoming the sole breadwinner for the family. That’s awesome!
As much as we want the fairytale ending in any relationship, it’s always better to be safe than sorry. The safest place to be is in a position that gives you a choice and often that includes having money in the bank, in investments and a regular income coming in.
There are women who are going to argue that ‘it’s not about the money’ or ‘he loves me, he’ll never leave me’ or ‘i’m just not interested in all that financial mambo jumbo’.
Yes, love and health are more important than money, but they are more enjoyable when you have a bit of cash behind you.
Your partner leaves you and you’re left to take care of everything not know anything about your current financial situation. Then you find out you have $100k worth of debt hanging over your head and no back up in place.
There’s a terrible accident and you’re suddenly and unexpectedly left to tackle everything whilst keeping strong for your young family.
Your partner falls ill and is unable to work and you have to not only take care of him but also the finances as well and there’s inadequate insurance in place.
All these scenarios are possible. And they do happen. More often than we’d like to think.
Our happy little bubbles of sunshine and roses do sometimes burst. And when they do, it can hurt like hell.
Knowing about your finances won’t necessarily miraculously fix the problem but the knowledge will make the process of figuring shit out much easier and at least give you one less thing to worry about.
Whether you’re a full-time worker, a stay at home mum or a nomad traveller, having a clue about your finances is the best investment you can make for your health, sanity, and future. Here are just a few things to stay on top of.
* Your savings – yes you need them. You should be saving at least 10% but preferably double or triple that if your budget allows for it. Automate it like right now, pay yourself first and do whatever you want with the rest.
* Your spending – do you keep track? Do you have a monthly limit? Play money is important but it shouldn’t infect your savings or debt repayments. Give yourself a weekly limit. I have $100 per week to do whatever the heck I please with. No questions asked. Although now that I’m building a house I plan on halving that.
* Your debt – how much do you owe? You want to get rid of it all as soon as possible. Automate the debt repayments. Make extra repayments wherever you can. You want to get rid of that debt pronto. I’ve had moments in life where I was stuck between a rock and a hard place. It sucks. Debt is a disease and you want to dispose of it asap. Even if it means working two or three jobs for a month. Just get rid of it.
* Your insurance – insurance is boring. Yes but it’s important. It’s better to have it and not need it then not have it and need it if you know what I mean. Life, TPD, Trauma, Income protection. Talk to a professional and figure out which one you need the most and work insurance into your budget. It’s a necessary evil.
* Your superannuation (or 401k in the US) – you might be way off retirement but it’s still something to consider. A little bit now can make a huge difference later on. The compulsory amount that employers contribute is not enough to retire comfortably. Once you’ve got your savings up, have zero debt, it might be worthwhile making some regular contributions to your superannuation. Even $100 a month can have a significant impact on your balance at retirement if you’ve still got 20 years to work on it. Gotta love compound interest.
* Have one place where all your information is stored safely. A financial folder is great so that both you and your partner know where it is. This should include a copy of all your important statements, bank details, insurance covers and a cover sheet which you can update with important contact details or financial goals. Aim to have a family meeting once every three to six months to reassess your budget, your goals and to update the details of any new accounts.
Money is a fact of life. You can’t survive without it. It’s not evil. It’s a necessity. Just because you don’t have it today, doesn’t mean you can’t have it tomorrow.
If it all seems overwhelming then take one step at a time. Just have a chat to get a general idea of what’s going on. If you’re stuck between a rock and a hard place and the idea of looking at the shit-hole you’ve gotten yourself into is making you queasy toughen up and make the decision to get your shit together.
I hit rock bottom. Having to move back home with my parents whilst I built my house made me realise that I had a spending problem. It made me analyse my behaviour and look at my finances maturely. I’ve made my financial file, discussed finances with the other half – although in this case, it’s him who needs to be updated on the info – and am moving to a better financial position and it’s helping me sleep at night.
As a woman, you are a consumer and a decision maker, make sure that the financial decisions you make each day align with your goals, ambitions, and budget.
You have the power to change your future, one small step at a time.