It’s New Year’s Resolution time. If you are still on the fence about making a resolution, then pick up a pen (or your smartphone) and go for it. If somehow “organizing your personal finances” didn’t make it to your top-of-list status in 2018, it’s OK. But real talk: It’ll take more time to catch up on money stuff the longer you let it go without taking control.
So, now what are some resolutions women might want to make in the new year? How can we achieve our goals in 2019? I have one simple piece of advice: make a money resolution.
Here’s what I know: we women don’t think about money as much as men do, and it is costing us a literal fortune over the course of our lives.
It’s time to change that. “Taking control of your money is probably the most important thing you can do and the best gift you can give yourself,” says Sallie Krawcheck, Co-Founder, and CEO of Ellevest, an automated investment platform for women.
We all want to live a happier, healthier life, and investing towards greater financial security is a key path to achieving your major life goals. Just like having a mentor at work to keep you motivated and focused in the workplace, it’s important that by the time you turn 30, you should have grown-up “adult goals” that will set you up for a successful financial future for years to come.
So here’s a roundup of her best advice on getting organized and making 2019 the year you’re on point with your money.
Make a budget and stick to it. We We recommend the 50/30/20 rule. It’s a high-level, flexible budgeting framework that can help you control where your money’s going without having to count every penny. You may have splurged or gone a little overboard this year, so take the time now to evaluate your budget this year. If you want to know more about the 50/30/2o rule works, read this.
Plan for the future. You work hard and in return your work gifts you with some pretty awesome perks. If your company offers a 401(k) retirement fund and a match, you should 100% be taking advantage of it. The most common retirement plans take the form of a 401K facilitated by your employer or a Roth IRA, which is a terrific option for freelancers or individuals employed by a company that does not offer 401K.
“But, why? Can’t I keep the money and save it,” you may be asking. Because a 401(k) allows you to invest pre-tax earnings, which saves your tax bill in the long run. Your work is essentially dropping dollars into your retirement account before they hit your paycheck, and this might even mean matching your contributions (bonus points).
Have an old 401(k) from a previous employer that is languishing somewhere? Roll that over to Ellevest right away, because they now offer 401(k) rollovers as well as IRA transfers. It’s super simple and they’ll even make a personalized recommendation regarding whether rolling over your 401(k) to Ellevest is in your best interests. The best part? Ellevest will help you with the rollover process and charges no additional fees to rollover your 401(k). Put your 401(k)s in one place: an Ellevest retirement account.
If you’re in debt don’t be too hard on yourself. Most of us have been in some form of debt, whether that is student loans, mortgages, or credit card debt. The good news is you won’t be drowning in debt for long if you make it a priority to pay it off in 2018. The sooner you pay off your debt the sooner your credit score will increase, and all the more smiles you will have on your face.
Life happens, we get it. One of the best ways to deal with life’s punches is being financially prepared.
“Our grandmothers used to call it “Mad Money”; we call it the F.U. Fund,” says Krawcheck. Simply put, an FU Fund is extra cash put aside to make sure you can cover your needs in case of an emergency. This fund should be 3 to 6 months of take-home pay in cash so that it’s easily accessible. You can set up an emergency fund with Ellevest. Best of all, they offer super low-interest rates and don’t charge a management fee because they firmly believe in the importance of having an emergency fund before you start investing.
In a planning mood? See how an investment plan could help you manage your finances.You can get a personalized portfolio in under 10 min. And it’s made by women, for women.
“Build wealth like a boss.” This is the big resolution where you make a plan. According to Krawcheck, building wealth may sound unattainable; but instead of thinking about building loads of money, think about building money towards your future goals — i.e. going on that dream vacation to France, buying that dream house, or simply feeling like you’re “doing it right” and putting your money to work.
While saving money is great, it’s not enough. Why? Because the money that’s invested has the opportunity to earn more money thanks to compounding. So, when you invest, you’re setting yourself up for the potential to earn a lot more money (and we do mean a lot). Get into it.
Because yes, life gets distracting, but a goal without a plan is just a wish. In 2019, take that wish and turn it into a win.
Ready to open your investing account? Follow the link below and you’ll be taken to Ellevest for more information.
