It’s that time of year when everyone claims their New Year’s resolutions. I don’t usually do resolutions, but this year I want to improve my knowledge in one area. This year I made a resolution to become more financially savvy. I want to get a better understanding of my retirement accounts, understand what to be doing with my savings and how much to save, when to invest, and how to create a better budget – that I can follow.
I started by doing some reading – how I begin any learning process. Something I found it everything I’ve read in the past week made an interesting point: women are more likely to struggle financially. Women make less money over their lifetime than men do, partly from making less than men, partly from going in and out of the workforce to care for children and aging parents. Women end up with less money saved for retirement than men, and more likely to live longer.
Here are some general statistics I found the most interesting:
- Almost 90% of women are the sole keeps of their personal finances at some point in their lives.
- 70% of Americans are living paycheck to paycheck.
- 40% of Americans have ever tried living on a budget.
It shouldn’t be that surprising that at some point women are on their own in terms of finances. What to do with your money and how to manage it in the long term if filled with question marks.
The above information came from On My Own Two Feet, a quick and easy to understand read about personal finance management – targeted to women. Unsure how much to save for an emergency or retirement? Clueless on when and how to invest? Questions about mortgages and owning a home? This is the book that covers the basics and includes where to get more in depth information, which you’ll be looking for when you finish reading it.
This week I picked up another interesting read – though not at all what I thought it would be or what I was looking for, I’ve been sucked into The Two Income Trap. The book looks how American middle class families went from living on one paycheck comfortably to reliant on two. In 1981 69,000 women filled for bankruptcy, while in 1999 that number was 500,000. Ten years later women filing alone made up 30% of the more than 1.5 million bankruptcies filed. Another 44% were couples filing together.
Young women have twice the challenge. As pointed out in a Forbes article this week by Meghan Casserly, millennials are stuck in a tough position. In this economy they are stuck making less money over time, working without a bonus or raise, occasionally getting a title bump. But that title bump and often even increased experience doesn’t help them later, as they become underpaid for the job they are doing, with little hope of moving into another role elsewhere now or in the near future. For those who have been looking for a new job, positions are hard to come by. I have friends who have been looking for something else for over a year –actively searching for something that gives them a step up, a raise, with more responsibility.
Several years ago, when I was graduating from college, the economy and job market looked bleak. That was nothing compared to what we are struggling with now. What better time for young women to take toll of their individual situations, try to make a budget and learn to save for the that emergency or rainy day, start putting away now for a retirement that already may seem so far out of reach. Want to own a home someday? Seems hard to accomplish when you’re living paycheck to paycheck, especially in a city as expensive as DC. It is getting out of that loop that makes a difference. Something I will be working to achieve this year.
Next up for me to read: Rich Dad, Poor Dad, recommended (and bought for me) by my mom.
So you’re already well versed in financial topics, and have a game plan for your money. How’d you do it? What books, blogs, websites did you read? Did you use a budgeting tool like Mint.com or Quicken? I want to know what other women have found to be helpful.