Many women today are balancing several priorities: career, family, friends and other obligations. Often, planning for your financial future gets lost in the shuffle, meaning women may not be ensuring that the money they’ve worked so hard to earn is working hard for them.
When you’ve reached a certain age, you may be responsible for someone else, whether that’s your partner, a child or even a pet. So when it comes to organizing your life and finances, it’s good to do it in preparation for the future, especially as none of us can guarantee a tomorrow. Here are some things to consider to get sorted and that you can do today!
It’s Never Too Late to Start Saving
Due to the magic of compounded interest, even when the rates are low, someone who starts to save for their retirement early doesn’t have to save as much as someone who starts saving later in life.
If two people decide to save for retirement, but one starts at 21 and the other at 31, the 21 year old can save $100 per month until they are 65 and accumulate $253,000 for their retirement (assuming a 6% annual rate of return). The person who starts at 31 on the other hand, will have to save $190 per month to have the same amount by age 65.
So the second person would have to pay almost twice as much per month to make up for waiting 10 years. It’s never too late to begin saving, but the sooner you start, the better off you will be.
Make Sure You Have A Will
It’s important to set yourself up with a will, and this is commonly done when you have other responsibilities other than for yourself. So that might be when you get married or when you have your first child.
You want to be able to leave some security or your possessions to someone you trust and love, and a will is the best way to ensure this happens. If you’ve recently separated from your partner and you share children, then it’s also good to ensure any divorce settlement advice is taken into consideration so that all of the financial agreements are honoured.
Prearrange Your Funeral Preferences
It seems a little morbid to be considering this, but everyone has to have this discussion at some point in their life to ensure any preferences you have are met because once you’re gone, you won’t have a say in your funeral!
If it’s not mentioned in your will, which it should be, then you want to make sure you tell a family member or two, including a friend so that others can validate your funeral preferences. It doesn’t need to be a long overdrawn conversation, you could simply write it all down in a letter and sign it. Give it someone to hold onto and to open it when the time is needed.
Get Life Insurance
Life insurance is another important financial factor to consider when it comes to being responsible for others. It’s also good to be able to leave a financial sum of money behind if your current financial assets aren’t substantial.
Life insurance is important for your financial future because you pay a small amount every month which will go towards a lump sum payment being given to your loved one when you’re gone. This comes in useful for example if you go before your time and you’re therefore leaving your partner to look after the children on their own.
Paying Off Debts
Debts can be a big problem for your future, especially when you buy property, get engaged or have children. These are all big milestones that end up becoming quite costly, and therefore you want some savings to go towards it all.
So it’s important to pay off your debts as soon as you get them. The sooner you do it, the better it is for your credit score and for avoiding you getting yourself into any further financial debt down the line. Try to limit the amount of time you give yourself to pay them off and only get loans or use your credit card in an emergency.
No matter what your vision of the future, by starting to plan for your financial future now can help ensure that you can enjoy the financial freedom and peace of mind to make your own choices later in life. But achieving these goals takes planning and commitment, which can help you feel more in control and confident that you have the basics covered for your financial future while enjoying life today.
Get started with the free MoneySense complete financial plan kit. It has all the tools you need to create your own financial plan in 11 easy steps. And download our free guide “How to Get What You Want in Life” to start your path to abundance.