How Every Woman Should Set Herself Up Moneywise Right Now
There is more to your financial future that what shoes you'll buy next season.
If we've heard it once, we've heard it a million times and blocked our ears to it because -- because frankly, when someone tells us we need to sort out our finances it's like saying we need to plan for the future and ... oh excuse us while we pour another glass of over-priced wine and fall asleep.
But. They have a point. Women especially need to plan finances because often they don't have anything tucked away for themselves, and when a relationship turns sour, they get into all sort of financial trouble.
Which is where Helen Baker comes in. The financial adviser has just written a book called On Your Own Two Feet Divorce: Your Survive and Thrive Financial Guide, and she's determined to make sure women set themselves up properly.
"I encourage all women, regardless of age or what’s happening in life, to ensure they have five financial foundations in place," she told 10 daily. "A spending and investment plan, insurance, estate planning, superannuation and an emergency fund." And before you say, well yeah, but what about shoes and not being a boring person... you should definitely have some ideas about your cash. And while they all sound like common sense, "it is rare to meet a woman who, without advisement, can honestly tick every box as being in place to the degree necessary for her age, life stage and goals," warned Helen.
So what do we need to do?
*closes ASOS website*
Get an emergency fund (stop all that spending for a moment)
"Every woman needs an emergency fund, a sum of backup money that is yours and only yours," advised Helen. "While it can be your means of escaping a relationship that’s gone sour without being penniless, it may enable you to join your best gfs on a spur-of-the-moment Scoopon bargain getaway to Bali --or pay bills if you suddenly lose your job. If you haven’t got one, start one now and watch it grow."
Do up a spending and investment plan (just do it)
"I don’t use the word ‘budget’ because it’s too restrictive and feeling restricted and deprived does not help you sustain a positive healthy mindset," Helen told 10 daily. "The reality is we spend money to pay for groceries, rent/mortgage, petrol etc. Instead of imposing hard and strict rules, denying yourself living, you need a way to balance your income against your expenses in a way that still leaves money left over to look at investing for your long-term future. Understand good debt, bad, debt and smart debt: not all debt is equal!"
Sort out your super (don't yawn)
While superannuation is one of the most tax-effective ways to build your investments for the future, it’s unlikely you have enough to bank on to see you through retirement, warned Helen. "In 2013-2014, there was a gender retirement age superannuation gap of 52.8% -- and given longevity trends, women statistically must make ours last longer."
Get some insurance -- yes really
"There are three forms of insurance that I believe every woman needs to consider and control: private health insurance; general insurance (e.g. home, contents, car, jewellery, luxury items, business); and personal insurance (life, total and permanent disability, income protection and trauma)," advised Helen. "While insurance needs do change with age and life events, it’s fair to say women are mostly under-insured. Value yourself."
Estate planning (maybe not now, but soon)
Did you know that while 97 per cent of Australians recognise the need for a will, little more than half actually have one? "Don’t be one of them," said Helen. And while you may not have a family yet, when you do, you need to plan your estate. But be warned -- it's not a walk in the park. "There’s also more to estate planning than just having a will," said Helen. "Have you organised a power of attorney or enduring power of attorney? Do you have an advanced health directive? What about a ‘letter of wishes’ to give you some voice from beyond the grave about how you want your children raised or testamentary trusts to protect assets in your ‘bloodline’? Estate planning law specialists can advise you."
Feature image: Getty