Celebrate Business Women’s Day with These 4 Tips for Financial Independence

Business Income Young fashion designer making sketches.

Women throughout the ages have kept the home fires burning. But in the modern world they are bringing home the bacon as well as frying it up in the pan. Yet I’m often amazed at the number of women, and men too, who don’t take an active role in managing their finances, drifting from payday to payday. In honor of Business Women’s Day, here are four tips to help you set goals for financial independence and steer a course that will take you there:

Save in your 401(k) plan. Yeah, I know, you’ve heard this advice before, and that’s because it’s important. Women need to save more than men do because they live longer. Yet statistics show that women contribute less to their tax-deductible retirement and savings funds than men do. If you don’t know where to begin, start small (even $25 per payday is a start), and every six months increase your retirement contributions by a small amount. After a couple of years, you’ll be saving 15% or more of your pay, which will provide financial security in the future while saving you taxes now.

Keep track of your spending. You know where your money comes from, but do you know where it goes? An online tool such as Mint.com can help you track your expenses and see where you have spending leaks. Similar to the comfort foods that you binge on when you need solace, spending leaks are just that, areas you overspend on when you aren’t paying attention or are indulging yourself. It could be eating out, clothes, entertainment, travel, wherever you are spending money out of habit. Set yourself a monthly or bi-weekly spending budget for those categories, then keep track and stick to your budget. The money you save can be split between saving for something you really want, like a shiny new car, and your retirement account (hello — remember that 401(k) we were just talking about?)

Banish debt. If you have credit card debt, it’s time to pay that off and stop paying finance charges that aren’t tax deductible. Oh, you have a zero-interest credit card? What about that 3% fee you paid to transfer your balance onto it? If you paid 3% to get six-months of zero interest, that’s 6% a year that you are spending on finance charges, and that adds up. Pay off the smallest balance cards first, so you have an immediate feeling of accomplishment, then move on to the bigger balances. Do this on a disciplined schedule and you’ll be debt free in just a couple of years.

Pay attention to taxes. Keep track of car mileage, business dinners, computer expenses, daily appointments, and anything else that could help you to substantiate your tax deductions. Deduct an office in your home if you regularly and exclusively use part of your home for business activities. If you own a business, pay your older children reasonable wages to help you with age-appropriate jobs in your business.

Comments (1) Leave your comment

Leave a Reply