Thrive – Helping You Make Financial Progress
Make your money work harder for you
On a given day, financial planning isn’t necessarily top of mind in our busy lives—even when it’s your day job. Just ask Jannine Allex, a Senior Branch Manager at Fidelity, mother of four, and the host of one of Ellevate’s recent webinars, “Thrive – Helping You Make Financial Progress.” She sat down to offer us advice on how to build a solid financial plan.
As women, we have a lot on our plates—we’re career-driven; we’re caretakers; we’re focused on our health and hobbies—and we play a multitude of roles in our daily lives. Despite this, it’s important to have a financial check-in every six months to make sure we’re on track for our future.
While we’re hard at work, we need to make our money work harder for us.
The Stats Don’t Lie
Over the past few years, Fidelity has conducted focus groups, which show that women are great at earning and saving, but not as effective at long-term investing. Only 29% of women believe they can realistically achieve their financial goals. Now is the time to get organized and turn this around, because right now, women are achieving more and more: By 2016, two-thirds of higher education degrees will be held by women. 40% of women are bread winners.
That’s not to say we don’t have a lot to balance: the average woman spends 15% of her working years outside the workforce caring for children or elderly parents. 90% of women will be solely responsible for their finances at some point in their lives—whether we are waiting longer to marry or we experience divorce or the loss of a spouse.
It’s more important now than ever—as women and as individuals—to plan for our future.
Build a Budget
Financial expert Jannine Allex breaks down how to build your budget. First ask yourself, “Are you spending less than you earn?” Separate your needs from your wants. Lighting, heat, rent/mortgage payment, groceries, transit costs VERSUS entertainment and cable, etc. I was personally disappointed to hear that eating out falls in this latter category!
Follow this framework for thinking about where your paycheck is going:
- Needs – 50%
-Savings and Debt –20%
> 15% goes towards retirement and 5% towards liquidity
Balancing Your Savings and Debt Priorities
Here’s the best advice for paying off debt. Set a strategy in this order of priority:
1. Be sure to have three months of expenses saved in case of an emergency or job loss.
2. Take advantage of free money at work! If your company matches 401K, what are you waiting for?
3. Pay off high-interest credit cards. Pronto.
4. Pay down private student loans. These loans usually have higher-interest rates than government loans, so make them a priority and start chipping away.
5. Set aside money for retirement planning. Consider putting away 10%-15% of your monthly income to give you more power in your retirement funds. It may hurt a little now, but it’ll be so worth it when you’re 80.
6. Other debt—Last but not least car payments and the like fall under this category.
Map Out Your Savings Goals—Life Is Too Long to Wait
Like any set of goals, think of them in terms of long-term goals (5+ years) and short-term goals (0-3 years). What’s achievable now? And where do you want to be with your savings in the long run? Women outlive men by an average of six years. Life is long, and as Jannine Allex stated, “Saving regularly and often is critical.”
According to Jannine, this is a great way to map out your savings goals as you plan for your future:
- Write down how much you’ll need and by when.
- Determine how much to put away each month/year.
- Designate specific amounts for each goal.
- Set up automatic payments.