The road to financial success can be a long one. Having the proper resources in place to ensure you are taken care of is essential to your financial freedom.
The CGS Team has put together a list of the 5 most important tools for savvy, saving women. These tools are extremely important to your financial success. It may not be possible to obtain all of these items at once, but as you begin to take control of your finances, the tools will come naturally.
Tool #1: Budget
Our first tool should come as no surprise. A budget is an essential instrument used to gauge your current financial state and prepare for your future. Budgets allow you to assess your financial situation, telling you where your money is coming in from, where it is going, and how much is left over.
Budgets also show where money may be mishandled. You can understand every aspect of your finances through a budget. All of the information that a budget can give is vital to achieving financial independence, as well as being a savvy, saving woman.
Whether you create your own budget or have a professional do it for you, it is a tool that you must have (and follow) to achieve your financial freedom. If you don’t have a budget already, let City Girl Savings founder Raya create a personalized budget portfolio for you! Click here for more information.
Tool #2: Retirement Plan
Whether in the form of a 401(k), 403(b) or IRA, a retirement plan is not only essential for becoming a savvy, saving woman, it is a requirement to financially secure your future after retirement.
If we lost you at the first sentence, check out the Finance 101 article on retirement plans. While some companies still offer pensions, they are not a reliable source of financial security after you retire. The only way to ensure a stable retirement is to set up your retirement plan as soon as possible.
Fortunately, most companies offer benefits (like employee matching) that can help grow your retirement plan quickly. Another perk of having your retirement plan through your employer is that the contribution can come right out of your paycheck. This eliminates the need for you to manually contribute.
If you don’t have a retirement plan already, get to it immediately!
Tool #3: Emergency Fund
After all of your debt is paid off (or moderately under control) and your retirement plan is being funded regularly, then you are ready to establish an emergency fund! Emergency funds are necessary because life is full of unexpected surprises!
Think of how happy you will be to know that if your car breaks down (heaven forbid) you can take care of the costs without racking up debt. Whether we like it or not, situations will come up that put us in a tough position. Things like losing your job, car problems, illness and more can take you from a good financial situation to a bad one, quickly.
Having an emergency savings fund in place helps lighten the blow of unfavorable events. If you have debt taken care of and a retirement plan in place, refer to your budget to see where you can cut back to start saving.
Even putting away $50 each check will make a difference. $50 a check can turn into $1300 after one year! That can definitely help take care of that transmission that needs a fix. Your goal should be to have an emergency fund that equals 6 months’ worth of living expenses.
Tool #4: Insurance
If you are lucky enough to still be on your parents’ car and health insurance, then go you! If not, you need to start thinking about your health and safety. Car insurance is easy because you are required by law to have it if you own a car.
If you are reading this and you don’t have car insurance but drive to work/school/anywhere every day, leave this site immediately and reach out to AllState, Geico, or any other car insurance company.
If anything happens to you or someone else while driving, having car insurance can help give you peace of mind that things will be taken care of quickly.
Health insurance is another important measure to protect you financially. Unfortunately, many people lack health insurance because of the cost. If you found a lump under your arm and went to the emergency room, took x-rays and had tests done, your insurance would cover a majority of those costs.
If you don’t have insurance, those medical bills are sent to you directly and are due immediately. Those bills would not be cheap either. Having health insurance protects you financially in times of pain, sickness and hurt.
A savvy, saving woman knows her worth and protects her mind and body. She has health insurance and attends her annual doctor and dentists visits consistently. Most employers offer health insurance at a lower rate if you sign up through them.
Reach out to your company’s HR department to get details of the insurance options available to you.
The last type of insurance may not be necessary right now, but it will be when you are a financially successful lady! Life insurance is a way of protecting your loved ones should you pass away early.
Life insurance can be used to take care of outstanding debt (which does not disappear after death), cover funeral costs, and provide funding for those who may have relied on you during life.
Consider purchasing life insurance when you have children or personal matters that will require a significant amount of financial attention after you pass.
Tool #5: Brokerage Account
Ok ladies, if you have your budget firmly in place, a retirement plan set up (individually or through your employer), have six months’ worth of savings in place for emergencies and all forms of necessary insurance paid for, then you are ready to increase your wealth!
The best way to gain a financial return is through investing. Whether you start your own company, rent properties or invest in the stock market, any method of increasing your net worth will help you become financially free.
If you are interested in investing in stocks, bonds and mutual funds, you will need a brokerage account. Scottrade, Charles Schwab, E-Trade and more offer fee-free brokerage accounts. Set one up for free and start researching potential investments. You can also utilize these companies to manage brokerage accounts for you.
Related: 6 Easy Ways to Get Started with Saving Money
As we said before, these tools will take time and discipline to achieve. Tackle each tool one by one as you can. Taking action now to set yourself up for financial success will make it that much easier to achieve your goal.
What do you think of these tools? Do you already have any of these tools in place? If so, what were the hardest (or easiest) ones to obtain? Share with the community so we can all gain insight. We look forward to hearing from you!
2 thoughts on “Tools for the Savvy Saving Woman”
I am proud to say that I have 3 of the 5 items! I need to work towards all 5! 🙂
Hey ladies! @Xenia-Jarostchuk @alexullrich @lulu98626 @ferncas2 @jacqueline-dion @dulce-criss @laurab Have you seen our post “Tools for the Savvy Saving Woman”? It’s a great read!