5 Money Lessons Every Woman Should Know By 30
Many fail to comprehend the importance of planning, saving for retirement, and budgeting because no one ever taught them how.
This is a huge problem given the fact that women generally live longer and unfortunately, earn less than their male counterparts.
A modern woman should be able to manage her money and this is exactly what this post is about. We bring you 5 money lessons every woman should know by 30.
Plan Your Budget
It's not a myth, budgeting really is an essential lesson we should all learn. Regardless of how much you earn, if you don't track your finances and don't know where your money goes each month, you'll have no idea of how much you need for a decent living.
Creating a budget might seem very boring and unnecessary for twenty-something-year-olds, but it is very important because it will become a habit.
You will learn how to manage money, plan a budget and stick to it, and have money left over to invest or put in a savings account.
Save As Much as You Can
The most well-known rule for budgeting recommends saving about 20% of your income and/or using it to pay your debt. That means that whatever is left after you pay your rent and bills, and after you leave a portion of your income for your wants, should go to a savings account and debt repayment.
Following such fixed rules may be very helpful for some people. Others will find that it's impossible to save that much. But if you can't stick to these figures, then just save whatever you can, as long as you do it every month.
Given the growing credit card debt and student debt, many young women find it hard to leave anything aside at the end of the month. But you'll be 60 one day and that usually comes sooner than we think, so we should start saving right now.
Debt Repayment First
Debt is an obstacle to financial stability. As long as you have debt on your credit card or you're repaying your student loans, you won't be able to save a lot or afford the things you want.
Plus, a high-interest credit debt will only get bigger over time so it's in your best interest (no pun intended) to repay it as soon as possible.
Pay more than the minimum if possible. Think of it as investing in your future. The sooner you pay it off, the more you will be able to put toward savings or mortgage.
Treat Yourself But Spend Reasonably
You probably hear a lot about how cutting all your wants is crucial for financial stability. Simply stop spending money on all the things you enjoy.
But we wouldn't advise the same. We believe one of the most important things to learn when it comes to money management is how to spend reasonably but still treat yourself from time to time.
If your morning latte on the way to work is something that you look forward to, don't cut it. Instead, avoid buying or spending on things that you don't enjoy as much. Completely depriving yourself of all the tiny pleasures won't help. It will only make you miserable.
The key is managing to save and still spend a little something on your favorite things such as brunch with your friends at your favorite restaurant or the occasional takeaway.
Set Money Aside for Emergencies
Having an emergency fund to rely on is probably the most important lesson women should master by 30. Instead of relying on someone else (a husband, boyfriend, parents), you should be able to rely on yourself in case you ever lose your job or end up with unexpected large expenses.
Covering an emergency bill is a huge problem for many people living from paycheck to paycheck. But setting money aside for an emergency fund seems impossible with high rent prices and low or inconsistent pay. Especially if you're attempting to save for your retirement on top of that.
However, imagine you're stuck in a situation that could easily be fixed if only you had savings to turn to. For example, you're in a terrible apartment that you can't leave because you can't afford to. Or you suddenly get ill and have to cover a medical bill.
When you have an emergency fund, if something like this happens, you can just dip into your piggy bank and fix the problem. Then start saving again for emergencies.
Mastering money management skills should be every young woman's priority because it is the key to independence. With these 5 money lessons in your sleeve, you'll be well on your way towards becoming financially stable.