To achieve financial independence and importantly have the right mindset, here are 10 things that every woman should consider:
1. Earn your own money
Unless you are very wealthy in your own right, it is very difficult to achieve financial independence if you are not earning any income.
2. Start today by being in control of your financial situation
That means understanding how much money is coming in and going out of your or the family’s finances, such as weekly/monthly expenses.
3. Know your good from bad debts
Good debt is often used to help build long-term wealth and bad debt can erode that financial security. For example, taking out a loan to study a course that will eventually lead to a career and provide you with a decent income is good debt, but a credit card or personal loan with a high interest rate that applies to a depreciating asset such as a car, is considered a bad debt.
4. Have plans in place
Plan to be actively paying off your debts such as credit cards and your home mortgage – even if it is considered a good debt with a low interest rate of 4% for example.
5. Know that renting is okay
If you don’t own a home, then know that nothing is wrong with renting. But be aware that paying for any accommodation, be that rent or a mortgage once you reach retirement age and are no longer working, can be expensive and drain your savings.
6. Have a plan for investing
Holding other assets like a share portfolio can provide you with income via dividends.
7. Have an equal say in relationship/family money decisions
Be realistic about periods of financial dependence but don’t undervalue your voice. When you are in a relationship, there may be times when you need to rely on a partner for financial support. This can happen at various life stages and even unexpectedly if you are unable to work for medical reasons.
8. Engage with your superannuation
Log into your account and get to know how much you have, what your fees are, as well as your insurances, investment options, returns and who your nominated beneficiaries are. If you are not happy with what you see, take control to change it.
9. Take control of your finances by researching your options or seeking help
In this day and age it is almost too easy to do your own research on financial products such as finding the best performing super fund or cash savings accounts. And if you can’t find the answers yourself, then seek professional advice.
10. Don’t ignore your rights
Never sign yourself up to a payment plan or a contract without reading the fine print and fully understanding how your financial security may be impacted – for better or worse.
This article was originally published in Issue 12, Hold Your Head High