If you’re a single woman living without a spouse, you may feel burdened by weighing finances on your own and worried whether you would have enough money to take care of yourself in the future.
To ease your worries and be safe, you must plan for your personal and financial security. What follows are a few critical financial planning tips to help you safeguard your future and provide peace of mind.
Learn The Art of Budgeting
To do some serious financial planning, you need to fall in love with the art of budgeting and gain control over your spending habits. Budgeting will help you track your income and expenses, making it easier to plan your savings and your investments.
Try to find the right budget system that won’t be too difficult to follow and that you will put into practice each month. One of the most appealing systems, as it’s elementary to track, is the 50/30/20. All you need to do is to split your income across three major categories: 50% you can spend on necessities, 30% on your wants, and 20% you can save or use for debt repayment.
If you have trouble knowing where your money goes, create a habit of using a budgeting app or a simple spreadsheet to track your expenses.
Pay Off Your Debts
Life without debts is the only path to gaining financial freedom. So, if you have any loans, make paying them off your priority, as it’s the only true path to gaining financial freedom. Not only does living in debt stop you from achieving your life goals, but it also feels overwhelming. All the anxiety caused by constant financial worries leads to various financial-related health issues, both physical and mental.
Debt-free, you will lead a less stressful life – you will finally have your car paid off, you won’t be throwing your money away on high-interest credit card payments, and you won’t owe anything to anyone.
Facing your debts and financial situation may seem hard at first. Still, with a good debt payoff strategy in place and discipline when it comes to changing lousy money practices, you’ll reduce stress in your life and have peace of mind. Plus, you’ll be able to save and invest in fulfilling your life goals.
Create An Emergency Fund
The typical recommendation for an emergency fund is to have enough money to cover 6 to 12 months of your essential living expenses, this is the same if you have a family. However, if possible, go for a larger buffer – 12 to 18 months.
This should be enough to cover you in the event of a financial crisis or a job loss. If you are a single mom, be sure to include your kids’ essential expenses in your emergency fund as well.
Expect The Unexpected
A usually neglected financial concern for women, in general, is planning for unexpected life events. These may include a long-term or terminal illness, disability, or sudden death. As stressful and painful as these events might be, they could also wreck your finances. It’s essential to know your options so that you won’t be blindsided in the future and can be prepared for the unexpected.
So what are your options? Those are disability insurance and income replacement, life insurance, and long-term care insurance. Some of these coverages might already be offered as benefits by your employer. If you already have them in place, review your coverage to meet your potential needs.
Have Multiple Streams of Income
The best financial advice for single women is to ensure multiple streams of income. For example, you may have a full-time job, but you can start a side job to bring in some extra cash.
To ensure financial success, try setting up passive income. Passive income is where you earn without using up much of your time after the initial set-up, such as affiliate marketing, rental properties, and royalties.
Having multiple income streams can prevent financial devastation from unexpected events such as a job loss and create financial security.
Invest For Your Retirement
Whatever your plans for the future are, you should start investing for retirement right away. This way, you will be able to use the advantage of the time ahead of you and all the benefits of compound interest, helping you earn far more than what you’ve started with.
Even if you are young and the idea of retirement seems vague and distant, start saving for your retirement and investing with your first job.
No one can care about your future more than you, so for financial security, you must be financially savvy, start saving and investing as soon as you can.
