The United States Census Bureau reported about 50% of women ages 55-66 have no personal retirement savings. If women aren’t saving for retirement, where is their income going? With growing economic uncertainty and increasing inflation, it has become clearer that managing day-to-day expenses is more challenging. What steps can women take to own their finances in today’s economic climate?
Make Lifestyle Adjustments
The quickest step women can take to own their finances, in an inflationary environment, is to get a grasp on the income coming in and out of their household. Take a moment to understand all of your monthly expenses and identify if they are all necessary. Sometimes, there are a few ways to stretch your budget hidden in those reoccurring expenses.
Things like subscriptions, utilities, and even food costs could be good variables to adjust in your budget. Take a look at even more “inflation busters” here. Making sure your budget can accommodate rising costs can be tricky, so that brings us to the next actionable step: managing your budget.
Manage Your Budget
Getting a good grasp on budgeting is an important step toward owning your finances. There are multiple types of budgeting strategies and tools to use to reach financial goals. You could try one these methods:
- Zero-based Budget: This method involves taking your income and assigning it to designated categories until your income minus expenses equals zero.
- 50/30/20: This method instructs 50% of income to necessary expenses, 30% to discretionary expenses, and 20% to savings and debt
- Envelope System: This system requires planning your expenses categorically, but with cash in an envelope.
In any financial journey, it is important to remember to keep the highest priority expenses at the top of your list like food, housing, transportation, and utilities. Once these are covered, you can move on to debt payoff and investing. Overall, creating a budget is a sure-fire way to take control of your finances and reach your goals.
Reduce Debt + Save
Finding ways to reduce debt helps you gain access to more income for building wealth. Whether you use the debt snowball or debt avalanche method, prioritizing debt payoff creates more room in your monthly budget for planned or unplanned expenses. The less debt you have, the more options and choices you have, especially during times of inflation when everything costs a little bit more across the board. Try working debt payoff into your financial plan to start to see some significant long-term benefits.
Invest + Build Wealth
While budgets are getting more and more pinched with inflation, it is still important to prioritize saving for the future as much as possible. Nerd wallet reported 27% of Americans say they have saved less than they normally would in retirement over the past 12 months due to inflation. It’s no easy task to manage the expenses of today and of the future, but trying to make a few small steps toward building wealth can be impactful to your financial situation.
Try things like investing a designated percentage of your income or save toward a rental property. Having long-term savings directly withdrawn from your check can help make it an easy routine. Stay-at-home partners can also have their own retirement account. As long as one person is bringing home a paycheck and you plan to file a joint tax return, you each can have your own investment account.
Choose The Right Insurance
Having the right insurance coverage is important to protecting the wealth you have built to this point. A sudden home emergency or health scare bill could hit hard without the right insurance to protect you. Double check your insurance coverage or take a peek at our quick guide for choosing the right insurance at the right time.
Even if you don’t love to live in spreadsheets or spend time with financial details, you can still manage your finances effectively. A well-planned financial strategy works in good and bad economic times. Find something that is sustainable for you and lean on professionals to help guide you through difficult times.
Bankers Life is Here
Taking control of your financial health may seem daunting, but you don’t have to tackle it alone. Bankers Life financial professionals understand the unique challenges that women face and can be by their side every step of the way. Contact us today!