Something I have increasingly noticed that is a little alarming to me is that we women don’t put away enough money for a rainy day. I have talked to friends who kept on putting off starting their 401K (company sponsored retirement plan) or have a few hundreds in their savings accounts and have been working professionally for years. My mother drummed it into my ears at an early age to always put away something for myself. I have an aunty that buys jewelry when she can afford to so that she can sell them if she ever falls on hard times. I also have a friend who does not have a boyfriend but is putting away $20.00 a week for her wedding fund. My point is that it does not matter how little it is or how you do it, you should always try to put away something for yourselves. A friend of mine was laid off for almost a year during the recession but was able to pay her bills and still live comfortably because she saved. For those of you that work for yourselves, it’s even more important to make sure you are on top of your finances.
Setting a budget and sticking to it can be one of the hardest things to do initially but it is very rewarding once you get the hang of it. I’m not saying you should deprive yourself, but how many pairs of shoes and bags can we have in our closets? With setting a budget, everyone has different ideas on how to go about it. But the fundamental starting point is to list out all your monthly expenses. You usually have fixed and variable expenses. Fixed expenses are bills that come every month and are always a set amount, like your rent, averaged electricity bill and insurance. Variable expenses are things that fluctuate each month, like restaurants/groceries, cost of fuel if you own a car, or your transportation fare if you don’t own a car. For variable expenses, track your receipts for about three months and you will notice a trend; that can help you set a budget for those expenses. If you live in the U.S or Canada, I recommend http://www.mint.com to help with tracking your expenses, because it’s automated, you don’t have to think too much or put too much effort into doing it.
When my friend first told me about her “wedding fund”, I thought it was really funny. But then another friend of mine told me she had a savings account for her vacation expenses, and I started to see the wisdom in it. You put away a little amount each month for a big expense that way when it comes time to pay for it, you won’t have to empty your wallet completely and live hand to mouth for the next three months. Even if you don’t end up using the money for that particular goal, the fact that you have something saved up is a comforting thought.
If you are a student, you can start training yourself by putting away whatever you can when you can. I was a perpetually broke college kid but I always put $20.00 or $50.00 into my savings account every three to six months. When you form the habit, you will find it easy to continue to save when you start working. If you already have a well paying job, start your 401k contribution or whatever company sponsored retirement plan your company offers. More than likely your company matches part of what you contribute. For example, if you contribute $20.00 each paycheck and your company matches it by 100% that means you are saving $40.00 per paycheck towards your retirement. Even if you plan to go back to Nigeria, you can always cash it out and take it home with you (note, there is a 10% maximum penalty if you cash it before age 65). When you get that tax refund or bonus check from work, consider putting a portion of it in savings or investing it.
For readers outside of North America, I’m not sure if company sponsored retirement/pension plans are available to you. So you can consider investing yourself. Investing is something I was really scared of and it took me a few years to work up courage to start. I asked some of my guy friends, some were not helpful at all, but one in particular encouraged me to give it a shot. He told me he started investing with $200.00. So I started off by reading Girl Get Your Money Straight and Rich Dad/Poor Dad. I also tore out an article from Essence Magazine that had 3 simple investment steps and I have carried it around in my purse since then. I recommend checking out http://www.learnvest.com which is a financial website geared towards women, it breaks down investing in a very easy to understand way.
At the end of the day, you have to do what works best for you depending on your situation, just remember to put away something for yourself. I understand that there is always something fighting for your money’s attention, but trust me if it’s not one thing, it will be something else, so it’s better to be selfish for your future.
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