While success comes in many different respects, be it a career, personal or social, there’s one common denominator among successful women — and that is they all have good financial habits that keep them on track achieving their goals. After all, what helps us get what we want, be it a dream vacation, home, or business? Yep, you guessed it: money.
Whether you’re in the early stages of your career or have been saving up for a while, it’s never too late to get into financial control. After all, research from Ellevest, a digital investing platform made with women in mind, shows that money is the #1 confidence booster for women — and who doesn’t want a constant confidence boost?
Get the life you want by establishing these five financial habits.
1. Pay Off Your Bad Debt
Before we talk about how you can establish good financial habits, we have to talk about getting rid of that “bad debt.”
Being debt-free before you start pursuing your other financial goals is like starting off with a clean slate. Credit card debt and student loans are things we’d prefer to put off paying towards because it’s really not an easy thing to do, but it’s the first major step in taking control of your financial future. We all have to start somewhere. A good way to do this is to at least establish a steady income so that you can pay off your debts and have a little spare change to treat yourself here and there too. Make sure you’re aren’t selling yourself short at work, and that your employer isn’t selling you short either. Negotiate for that raise (more on how to that here) or compensation package that you deserve and that will get you closer to your goals.
Paying off your bad debts can be an intimidating prospect we get it. But the truth is you shouldn’t be afraid to ask for help, and not just because nerves might interfere with you, — but also because data proves that you’re likely to accomplish getting rid of that debt if you write it down. Now to the good debt. Good debt like student debt does not necessarily need to be paid right away, in part because investing your money in a diversified, low-cost investment portfolio is likely to earn you a greater return than the interest on that debt will cost you over time. Still, you should check periodically for ways to lower your student payments. For example, if you have student loans, putting them on autopay, which can help you save 0.25% from most lenders (a fun little tip we learned). And look at sites like Lendkey to refinance.
So, in review: Consider keeping “good debt” (like student loans) that costs you less than 4% a year outstanding and investing your money in a diversified portfolio instead.
Try it now: New to investing? This can help. You can speak with an expert financial advisor at Ellevest on topics ranging from how to get rid of debt to tips to investing.
2. Don’t Just Save — Invest
Sallie Krawcheck, Ellevest’s CEO, says, “Investing regularly is how you can become an experienced investor (and improve your chances of reaching your goals).”
Women aren’t missing out on big returns because they’re making risky investments. In fact, women are missing out because they aren’t even investing at all. Studies show that women are better investors than men, so why leave it to them to do the investing for us? By not investing your money and just stashing it in savings, you’re actually missing out on making an additional $100 every single day. Don’t wait on taking the leap! If you need a little help divvying up your paycheck, follow this rule: set aside 50 percent for needs, 30 percent for wants, and 20 percent to invest towards your biggest goals, be it a house or a dream vacation.
Krawcheck also notes that women outlive men and our salaries grow at different rates then men’s do. An Ellevest portfolio takes all of this into consideration to fit your financial needs best.
Try it now: Have questions about investing? Get a personalized financial plan in just 15 minutes and have expert advice at your fingertips.
Think you need a lot to invest? You really don’t – all it takes it $1 to make your first investment.
3. Set Up an Emergency Fund
Life happens — and you never know just when a natural disaster will strike, your car will break down, or if going that extra mile at spin class will turn into a visit to the emergency room. Your money is your power, and having money stashed away for those less-than-desirable moments in life will help you breathe easy during difficult times. Set aside whatever you can towards your emergency fund while also building your wealth by investing.
Try it: Open up an account with Ellevest and get enjoy 0% investment fees on your emergency fund.
4. Schedule a Call With a Financial Advisor
Even a go-getter like you doesn’t have all of the answers all of the time. That’s totally okay — after all, every successful woman has an entourage. Having a reliable financial advisor can help you navigate through sticky situations and answer your most burning financial questions. Whether you need help mapping out your financial future or want guidance on how to save up for a specific goal, your financial advisor will be able to help you through every major decision you make with your money. You don’t have to be a Wall Street expert yourself to start building up your wealth!
Try it now: Schedule a call with a Certified Financial Planner to receive one-on-one guidance for issues ranging from family planning to establish a retirement timeline.
5. Remember Your Retirement is YOUR Retirement
We often think retirement is so far away, and that hopefully, everything will fall into place financially by then. What successful women know is that the path to a carefree retirement starts right now. The moment that you start your first job, set aside some time to set up and understand your 401k. If your employer offers a 401k match, take advantage of it (hey, it’s basically free money!). Once you’ve maxed out your 401k, look into setting up an IRA. There are different kinds of IRAs out there, so make sure to do your research on what’s the best option for you. Future You will thank you for it!
Try it now: Talk to a financial professional about how to consolidate your IRA and old 401ks and get ready to save up for a secure and happy retirement.
Pay yourself first: Your new golden rule for 2019. Make sure a cut of every paycheck goes straight to your retirement or savings account and does not pass go. Pay yourself first and you’ll retire like a boss later. Pssst… here are some other budgeting ideas.
Here are more personal finance topics for you…
5 Ways to Start Investing with Little Money
8 Great Investing Tips for First-Time Women Investors
The Personal Finance Tips Everyone In Their 20s Should Follow
Questions? We’re here to help. Leave us a comment and we’ll get back to you!
Disclosures: We’re excited to be teaming up with the team at Ellevest to start this conversation about women and money. We may receive compensation if you become an Ellevest client.
