Women & Finance: Money Saving Ideas

Women & Finance: Money Saving Ideas

June 15, 2021
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Being a single woman has both its benefits and its challenges. You can make the best decisions on behalf of yourself and any family you may be raising. However, you are also solely responsible for all financial aspects of your day-to-day life and her future. Most financial advice is created for couples. But for anyone relying on their own income, you need to stay focused and motivated on your financial health and future.

Create A Budget
Without shared expenses, you have total control over how and where you spend your money. This means you get to decide how much is saved, too. Are you new to budgeting? Check with your financial institution or look for a user-friendly app to help manage your everyday finances. These can help point out areas of wasteful spending. By cutting back on expenses you can use extra cash to pay off debt and save for the future. Revisit your budget once a year to spot any significant changes you should make. As you pay off debts, saving is likely to increase, or you may find opportunities to adjust your lifestyle.

Create A Debt Management Strategy
Ideally, you should live with little to no debt. If you find yourself relying on debt, especially for everyday purchases, you need to revisit your budget. Getting out of debt is not as difficult as you might think. It just takes focus and commitment. Two popular methods for eliminating debt are the “debt snowball” and the “debt avalanche.” Both methods are very similar, but use different approaches.

First, you gather all of your credit card accounts and list them according to payoff balance and interest rate. To snowball the debt, your focus account is the one with the smallest payoff balance. You begin by paying the minimum balance on all other accounts and the maximum you can afford on your focus account. When you’ve paid it off, the next account with the smallest balance becomes your focus account. The avalanche method works similarly, except your focus is paying off high interest accounts first.

Establish An Emergency Fund
Most financial planners recommend an emergency fund covering 3-6 months of expenses with a total loss of income. This typically assumes a dual income household with two adults actively looking for work to get back on their feet. As an independent woman, you rely on yourself. This also means if you suffer a major financial setback or total loss of income, it’s up to you to manage it. Instead of three to six months, you should focus on keeping an emergency fund of 9 to 12 months. You’ll find peace of mind as you take care of yourself in times of uncertainty, feeling less pressure. Rather than focusing on fixing a short-term problem, you can take your time to craft a long-term solution.

Save For A Comfortable Retirement
Enjoying retirement as a single woman can be a wonderful experience. You get to set your retirement goals and plan how to enjoy those years. But without making savings a priority, none of it will be possible. Many financial planners recommend contributing 15% of your income to retirement. Check out your company’s retirement benefits. Many companies offer 401(k) investment options and even match contributions. Get informed on what they offer so you can contribute a minimum of what your company matches. (Ex: If your company matches 5% of your earnings, you should contribute 5%.)

After you have started contributing to a 401(k), look into IRA options. Many IRAs are invested in mutual funds to minimize risk and still give you a great return. Once you’ve found an option you feel comfortable with, contribute an amount above your 401(k) contribution to bring your total retirement investment to 15%. (Ex: If you are contributing 5% to your 401(k), invest 10% into the IRA.)

Cover Yourself With Disability Insurance
As a single woman, financial responsibility for your household falls on you. This means you have the independence to make your own financial decisions, but you also need to be smart in your planning. Do you have a plan if you suffer a major injury or illness? Even with a well-funded emergency fund, it doesn’t make sense to deplete it if you can have a portion of your income replaced because you are unable to work. This insurance may be available through your employer. Find out what benefits are available to you and make sure you have adequate coverage.

Financial planning can be beneficial for any woman that is dedicated to reaching her financial goals. It’s important to surround yourself with other financially motivated people who want to see you achieve your goals.

Regardless of whether or not you have children, you’ll also want to make sure you have an estate plan in place, as well. You’ll need to know who will make decisions on your behalf if, for any reason, you are unable to do so.

Have questions about your finances? Click on the link below to schedule an appointment.


Gowdy Financial Group, LLC., is a Fee-Only, Financial Advisory firm dedicated to helping women, from all backgrounds and income levels, get out of debt, save toward your goals and enjoy the freedom that comes with being in control of your money. We don't sell products; we provide solutions. "Your Goals. Our Solutions." Serving Clients Nationwide.