Financial planning for women is important regardless of your current status. Whether you are single, married, changing careers, starting a family, getting divorced, or caring for elderly parents, there are key financial steps you should be taking to ensure you meet your financial goals.
When it comes to financial planning for women, it can get overwhelming. However, with these financial steps, you can create a plan to ensure you are financially prepared for whatever life stage you are at. You can also always leverage our example of a financial plan to create yours!
Financial planning for women if you are employed
Whether you are the female breadwinner or working part-time, these are key steps to include in your plan.
Take advantage of your employers 401k match
If your employer offers a retirement savings plan with a match, you should definitely be taking advantage of it. You can do this by contributing enough to at least get the full match your employer is offering. It's essentially free money.
If your employer's plan does not have a match, contribute anyway with a goal to eventually max out your contributions.
No employer-sponsored retirement plan or self-employed? Set up your own IRA through a brokerage and make your retirement contributions that way. The limits are lower, but it's a great start to your long-term retirement savings.
Also, you can start looking into non-retirement investing and repurpose them as investments towards your retirement. One of the most important steps of financial planning for women is saving for retirement.
Bulk up your emergency fund
It's important to set up your emergency fund. This is one of the most important things to do when it comes to financial planning for women. Your first goal should be getting it to $1,000. Then work towards saving 3 - 6 months of your basic living expenses.
This would be to cover things like food, transportation, and housing. This way, you can ensure you don't have to leverage debt in the event of an unexpected situation. Major expenses such as fixing your car, home repairs, or losing your job can wreak havoc on your finances if you don't prepare for them!
Pay yourself first
Another important part of financial planning for women is to learn to pay yourself first! It's so easy to let money slip through our fingers and not save. Set up automatic transfers to your savings accounts to ensure you are paying yourself before spending money.
Even setting up a transfer of $25 a week adds up to $1,300 in just a year! You can also contact your employer or bank to see if you can have your paycheck automatically split into different accounts.
Pay off high-interest debt
Start paying off any debt you might have especially high-interest credit card debt. If you have high-interest debt, get your emergency fund to $1,000 and then focus on getting rid of that debt asap.
High-interest debt is costly, and the longer you keep it, the more you pay. Craft a debt reduction strategy to get out of debt fast!
Get properly insured
Review your insurance options to make sure you have the right ones in place. Different types of insurance policies will include disability, life, health, auto, home, rental, etc. Also, keep your beneficiaries up-to-date on all your accounts.
Make a plan for your children
If you have children, you can start saving for their college education needs. Start building their shorter-term needs into your budgeting and savings plans as well.
Financial planning for women to take if you are in a serious relationship or marriage
Getting married and joining your finances together means working as a team. Here are some steps you can take to plan your finances as a couple.
Talk about finances as a couple
It's important that you are communicating your life and financial goals with your partner. Learning to tackle your finances as a team is an essential part of financial planning for women. Talk about what you'd like to accomplish together.
Set time aside once a month to go over your progress. Review your budget as a unit, including your debt repayment, savings, and investment plans.
Update your beneficiaries
Update your beneficiary information on your accounts and insurance. Remember to include your significant others, i.e., your spouse and children.
File your taxes together
File your taxes together to avoid the penalties of filing separately if you are married. If you file separately, you will have a higher tax rate and cannot claim certain tax exemptions and deductions.
If you file your taxes separately while you are married, be sure to discuss things with a tax accountant so you know the differences in both scenarios.
Financial planning for women to take when switching jobs
Have you recently changed jobs? Be sure to follow these steps to be sure your plan is on track!
Transfer your retirement accounts
If you've found a new job, don't forget to move your retirement savings plan away from your old employer. This is because many employers charge maintenance fees for retirement accounts that belong to former employees.
Rather than rolling your retirement savings into your new employer's plan, put it into an IRA through a brokerage firm. This will give you more investment options.
Enroll in your employer retirement savings plan
Start investing in your new employer's retirement savings plan if they offer one. You don't want to take any unnecessary breaks away from your long-term savings plans.
Update your insurance policies
Review your insurance needs and options and adjust accordingly, i.e., disability, life, health, auto, home, rental, etc. For instance, if you are recently married, you may want to add your spouse to your new policy.
Financial planning for women that are expecting a baby
Congratulations on starting a family! So, how do you plan your finances for a baby? Use these key steps to properly prepare your plan for your new addition.
Update your budget to include your baby's expenses
While having children is a blessing, they also come with their own expenses. You want to be sure that you include your child's expenses in your monthly budget. So, be sure to review and update your budget for when the baby arrives.
Know the costs of having a baby
Consider what your costs of having a new baby will be initially. For instance, the cost of formula, diapers, clothes, childcare, etc., and plan accordingly by saving for the baby's needs before their arrival.
Of course, you can learn ways to cut costs and save on items by being a thrifty shopper! But knowing the costs of having children is a vital part of financial planning for women.
Update your health and life insurance to include your baby
Update your health and life insurance to include your child so they are adequately covered. Having the proper insurance for your child can cut costs on health care and take care of them if something happens to you.
Adjust your savings plans to include your baby
Bulk up your emergency fund to include your child's basic needs for 3 to 6 months as well. Also, start putting money aside for your child's future expenses and college education.
Create an estate plan—it's an important part of financial planning for women
Having an estate plan is important, but even more when you have children. You want to ensure that everything is in place by choosing a guardian for your child and ensuring your assets are distributed as you wish.
Financial planning for women to take after a divorce or loss of a spouse
Unfortunately, divorces happen, but it's important to get back on your feet as quickly as possible when it comes to your finances.
Update your financial accounts
Be sure to close all joint accounts and open new accounts in your own name. Update your beneficiaries on all your accounts, including your insurance and retirement savings accounts.
Make a new financial plan for your personal finances
Learn how to budget on your own and review your finances every month at the very minimum. You also want to focus on rebuilding and take ownership of your finances in their entirety. For instance, budgeting, bulking up your emergency fund, tax planning, retirement savings, etc.
It's also a good idea to be aware of and review your social security benefits. Finally, it's important to understand the tax implications of inheriting any investment or retirement accounts due to the loss of a spouse.
Financial planning for women to take when caring for elderly parents
Your parents are important, so of course, you should include them in your plan. Understanding the costs and care needed is essential to preparing for upcoming expenses for aging parents.
Determine the cost to care for your elderly parents
Determine the cost of caring for your aging parents and include it in your financial picture to prepare for the expenses you have to pay. For instance, out-of-pocket costs to cover prescriptions, gas to doctors appointments, food, and more.
Review their plan and determine how to fill in the gaps
Determine what financial and health care options they have in place for themselves. This includes any social security benefits, and then you can determine what gaps need to be filled.
Update your tax filing status to include your parents as dependents
Update your dependents on your insurance documentation and when you file your taxes. This can help you get tax credits to aid in caring for your elderly parents.
Financial planning for women is key to financial success
Financial planning for women is essential for success, no matter what stage in life you are at. Creating a plan and financial goals will help you take the steps needed to prepare you for emergencies and save for a comfortable retirement. Start creating your financial plans with our completely FREE financial courses and worksheets!