Women often talk about finding financial freedom, but single women in particular need to think about being financially sound, according to Tiffany Aliche, a personal finance expert who is known as “The Budgetnista” her hundreds of thousands of followers on social media.
“The goal is to really take a holistic view of my finances, not just‘ I want to be financially free, ’” Aliche, whose new book “Make Money Well“focuses on 10 components, said”Good morning America. “” Especially single women should be hypersensitive to a holistic view of their finances and take it step by step. “
According to Aliche, financial integrity is achieved when the 10 basic components of a person’s financial life are in order. Those 10 components include budgeting, saving, paying off debt, earning good credit, learning to make money, investing, insuring, creating net worth, creating a money team, and planning a property, according to Aliche.
“Ask yourself, ‘Do I have a budget? Great. What about the savings plan?'” Aliche explained. “And gather those 10 steps along the way.”
For many women recession caused by a coronavirus pandemic added financial stress this year. There is fired millions of women, and forced many women to access their retirement and savings accounts so they could live.
In the midst of that crisis, here are five tips from Aliche on how to help women, and especially single women, become financially whole.
1. Make a name for your ‘later lady’ and plan for her.
Aliche created an image of herself in retirement and called her “Wanda,” and that’s what she thinks of when making decisions about investing her money.
“A study was done that said that people do not separate for retirement because they are separated from the older self. They do not see themselves as if they are always older,” Aliche said. “So my older self is Wanda, and I almost think of her as my grandmother or my later lady.”
Aliche said she thinks of Wanda, for example, when deciding whether to maximize her Roth IRA with her retirement account of 401 (k).
“You get tax breaks now with a 401 (k) or traditional IRA, but with a Roth IRA you get tax breaks later,” she said. “So I think, ‘Okay, I have my match at work. Let me take care of Wanda. Let me maximize my Roth IRA, because although I don’t tax-relieve in the beginning, I will, when I’m Wanda’s age, be able to withdraw money and growth without taxes. ‘”
“I think to myself,‘ Do I want a tax deduction now for Tiffany, who is able to work and is young, or do I want Wanda to get a tax deduction like, ‘Girl, don’t work on it here at 80,’ ”Aliche added.
2. Share and save money.
Aliche advises women to “save like a squirrel” by splitting their money before it even hits their checking account.
“I want you to go to yours [human resources] go to your payroll department and say, ‘Instead of putting all my money in my checking account, could you also put my money in my savings account,’ ”she said, explaining that adding a direct deposit to your savings account will allow will give you money “without worrying about being disciplined”.
“And make sure the savings account is an online savings account because it makes it inconvenient,” Aliche added. “Unpleasant money is saved.”
3. Be strategic after filing taxes.
If you owe money after filing taxes, Aliche recommends that you consider an appointment with an accountant to make sure you paid your taxes correctly.
If you have submitted the documentation correctly and if you cannot afford to pay the debt, an accountant can help you agree on a payment plan, according to Aliche.
If your money is refunded, Aliche said take a good look at where you are before you automatically spend or invest the money.
“Take care of your health and safety bills first and foremost. Don’t put them on anything other than things that maintain your health and safety,” she said. “You need food and a safe place to live. Make sure it’s a priority.”
If you need your immediate expenses, Aliche said then make sure to fund your emergency fund.
How much you will save in the emergency fund depends on what business you are in and how quickly you can change your income or get another job, according to Aliche. It recommends savings of at least three months cost.
Only after you make sure you have money saved for your current and future expenses should you first consider repaying a high-interest debt and then, finally, investing the money, according to Aliche.
4. Know when to hire financial aid and when to hire yourself.
Aliche’s rule is to hire a financial advisor if you have $ 250,000 or more to invest. By the way, she says advisor fees are usually too expensive to pay off.
“It’s true that you really don’t need all of that if you’ve just done the financial basics,” Aliche said. “If you have a retirement account at work and you’re doing a target date account where you set a target date that you want to withdraw, that’s it.”
“If you are investing in wealth, choose a mutual fund that is similar to the target date fund and set it up so that, for example, you put in $ 50 each month,” she said. “If you just did it, you’d be jumping ahead of everyone else.”
Aliche said the exception to the rule is that hiring a financial planner with a chargeable certificate can be worth the money. It’s someone you could hire for $ 100 to $ 500 an hour to review major financial decisions, like going back to school or not.
5. Learn to make money.
“Everyone should know how to make extra money,” Aliche said of her “learn to make money” philosophy.
According to Aliche, one way to make money outside of a regular job is to monetize your skills.
“I used to be an educator for more than 10 years, and when I did that, I taught and looked after children,” she said. “What set of skills can you use to make money as your side crowd?”
At work, one way to make more money is to create a “go to me” file, which Aliche calls, so you have a record of your accomplishments that make you your employer’s asset.
“When you help a company work for money or save a company where you work for money, when that happens, you put it in a file or write it down, so when you go for a checkup or ask for a raise, you can quantify your ability to do it,” she explained.