4 Financial Planning Tips for Young Independent Women
By Deborah Sweeney on February 22, 2013
From the hit HBO series “Girls” to Marissa Mayer’s takeover as CEO at Yahoo, and even Beyonce’s heavily viewed documentary “Life Is But A Dream” it’s pretty clear that it’s the ladies who truly run the world. But while I applaud young professional women on their way up the ladder to the glass ceiling, I have a few major words of advice to pass along when it comes to making sound financial decisions – tips that can serve these ladies well into the future for a long time to come!
Consider What is Needed Versus What is Wanted
Independence is a tricky thing. There’s nothing quite like the satisfaction that comes in knowing that you bought something all on your own or funded a portion of your life without any help from your parents. At the same time, independent women rely solely on themselves for everything. If they fall, a safety net needs to be in place. And it’s hard to get a safety net created if you constantly buy clothes and shoes and take expensive vacations without keeping a strong savings account on the back burner. Think about what you want versus what you need and create a monthly budget that allows you to tuck away a little bit of money for your savings each month.
Pay Off Your Credit Cards in Full
Avoid excessive purchases and not being able to pay off your credit cards in full. Most credit cards come with high interest rates and they can end up adding extra money for an interest payments which may make it take even longer to pay the card off.
Consider a Roth 401(k)
Making great money in the career field of your dreams? Look into getting a Roth 401(k). This is a type of retirement savings plan that combines features of a Roth IRA with a traditional 401(k) plan and helps pay for taxes now so that when money is later taken out after retirement, it will be tax free! It’s never too early to start considering the future, so if you’re in a position to do it, start looking into the option.
Create a 401(k) Plan
If you work paycheck to paycheck, put as much as possible into your savings or a 401(k) plan, especially if it is matched by your employer. Try to put in about 2-3% because the money will grow immensely over the years. Plus it's a strategy that, if started young, can mean an amazing retirement - little pain now for huge gain later. It's also held out from the check in advance, so its money you never see – you can't spend what you don't have!