I’m the go-to girl for all things money. The one that always provides money advice and tips to my clients, friends and even strangers. I used to feel like a walking encyclopedia of information, because I constantly receive calls, texts and emails asking me how to navigate financial dilemmas. But I get it. There’s a reason people look to me for counsel, in this area. They trust experience. They want to hear from someone that has been through it, survived it and bounced back from it… especially when it comes to their finances.
Here’s the thing, I offer a unique perspective. I’ve faced and overcome just about every possible financial obstacle. Over time I came to realize that bad credit and financial misfortune does not mean that you’re a bad or irresponsible person. Sometimes, we make poor decisions and sometimes life just happens. I’ve learned that others, like you, can benefit from my experiences, trial and error and breakthroughs! …I’m also pretty sure that my financial knowledge and b-school education doesn’t hurt either.
There’s no better asset than someone that understands your situation, that is willing to help without judgment or criticism and that genuinely wants to see you win. I’m that ‘someone’ for you. So, to help as many women as possible, I’ve decided to share my tips and strategies with you – to help you take control of your finances and create a bold, beautiful and brilliant bank account!
Welcome to Wealth and Women
Let’s be real, most people don’t take control of their finances because they don’t know where to start. From credit scores to mastering a budget, it can all be overwhelming and sometimes even frustrating. But, I believe that informed women are powerful women. I am convinced that in order to really understand the importance of mastering your money, it’s important to know the facts; and to have a good understanding of why your money needs your attention!
For this inaugural post, I decided to do a little research and provide you with some of the alarming statistics that I discovered, so that you can evaluate where you are currently positioned (compared to other women), improve your financial knowledge and be better prepared for your future. Even if you’ve got a handle on your finances, there’s always room for improvement and this is information that every woman should know.
The Non-Existent Emergency Fund
A Bankrate Survey revealed that 28% of survey participants had NO emergency savings. Approximately 18% had less than three months of expenses in savings. And about 28% of those surveyed had 6 months or more stashed away in an emergency fund.
The results also show a notable trend among low income women:
Women, those in lower-income households and those with a lower level of education, were most likely to report having no emergency savings.
Low income isn’t the only predictor – lack of education was a culprit as well:
Those with a high school diploma or less were 4 times as likely as college grads to say they had no emergency savings.
What’s alarming about this percentage is that this survey was completed by Bankrate – which means that most participants are actively involved in their finances. The true raw statistic, I’m sure would show a much higher percentage of people that live with no cushion.
The real question is which group represents your current financial situation?
Determining how much of an emergency fund you need to have can vary, based on several different factors, but my general rule of thumb is to have a minimum of 3 months of expenses in your emergency fund. Three months of expenses will allow you to weather most financial setbacks (i.e.: job loss, unexpected auto or home repairs…etc.) … at least temporarily, with peace of mind. And while I don’t believe that you need a college degree, or a high paying job to know the importance of savings, most would benefit from being exposed to ways to earn additional income, how to spend smarter and easy saving strategies.
Moving beyond payday
A recent survey by CNN determined that 68% of Americans currently live paycheck to paycheck – having less than $800 between each pay period to cover living expenses, savings and basic needs. For these households, missing one cycle of pay could potentially be catastrophic to their finances. What makes things worse, is that it’s difficult for those in this situation to plan for life events, prepare for a home purchase or even pay down credit card debt – because there is never any extra money available.
Some people don’t acknowledge that their living paycheck to paycheck until an emergency happens; because for the most part they get by and pay their bills on time. If this sounds familiar, it’s time to start looking into ways that you can increase your earnings and decrease your expenses. You need some breathing room to be in a position to plan for your financial future.
The looming reality of debt
Information released by the federal reserve shows that the average person between the ages of 18 and 65 has $4,717 of credit card debt. Now if you double that, for a household with two adults and it’s more like $9,400+! And it doesn’t stop there. The average student loan debt, according to NerdWallet, per person is a whopping $32,264!
Side note: These are all ‘averages’. There are individuals, couples and families out there, that are struggling with much higher amounts of debt. When is the last time that you sat down and calculated your total debt (i.e. credit cards, loans, student loans, car payment, mortgage…etc.)? Be informed.
Is FULL retirement REALLY in your future?
We all fantasize about the day that we will be able to embrace a life without work. A life filled with travel, hobbies and family. But retirement requires money and based on a report by the Federal Reserve, most of us won’t be adequately prepared to make that transition. The report found that the average person/family are not saving for their retirement, at all. That means they have ZERO savings for their golden years! But, there’s more…
The average amount of a retirement account (across all age groups) is a meager $60,000; and this statistic only calculates for those that are actually setting aside funds for retirement. When you think about the fact that Americans are living longer than ever, that 60K isn’t going to last very long.
A breakdown of that statistic shows that the average value of retirement accounts for families who are saving for retirement is:
Families with adults that are 18 to 35 = $12,000
Families with adults ages 35 to 44 = $42,700
Families with adults older than 75 = $69,500
**Remember: these calculations are based on people that are contributing to their retirement savings! If you were to account, for the approximately 45% of Americans that have NO retirement savings, those ‘average’ numbers are even less.
Why it’s all so important
These are just a few of the many statistics that jumped out at me, as I prepare to help you transform your finances, improve your credit and increase your net worth. Each, important in their own rite, has to be mastered, if you are to have true financial success. With women that are working full-time still earning only 77% of what men earn, doing the exact same job… it’s important to ensure your own financial success. Because the ugly truth is that it would take you a little over 15 months to earn what it would take your male co-worker to make in only 12.
And although women are climbing the ranks in corporate america, making great strides in education and even business creation and ownership, a Wells Fargo study shows that, despite our accomplishments, we are still not closing the pay gap. With the average household income for millennial men at $77,000, it’s astonishing to know that it’s only $56,000 for millennial women (with the same education and work experience).
Think about that for a moment.
Let it sink in.
Because it’s facts, statistics and percentages like the ones that I’ve outlined and explained in this post, that should fuel your desire to create wealth, eliminate debt and save for your future.
What to expect:
My weekly posts are designed to help you: change how you feel about money, increase the ways you earn it, open your eyes to non-traditional streams of income, explore new ways to save, build wealth and improve your credit score!
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Don’t miss next week’s post as we navigate the importance of the monthly budget and having goals for your money! You’ll learn how to create a realistic budget, that aligns your bank account with your financial goals. I’m also sharing key secrets to help you identify where you can trim back on expenses and maximize your income.
Have a specific financial question? Want information on a particular topic or have a tip that you would like to share… leave it in the comment section, let’s have a conversation.