Let’s talk about money. Love it or hate it, we all need it, and chances are we could all be a little bit smarter about how we spend, save, and invest it. The problem with keeping on top of your finances is that it is easier said than done. Even if you cover your bases by budgeting and contributing to your 401(k), it feels like there is always more you can do to be at the top of your financial game. It’s some people’s job to be savvy about finance — they go to school for years, earn certifications, and spend 40 hours a week utilizing their financial knowledge. But the rest of us already have jobs and don’t have a ton of free time to become financial experts, which is why we’ve done some of the work for you and rounded up six pieces of financial advice that you need to hear — right now. They’re simple and to the point, but oh-so-important.
1. Work toward earning more money
Unless you have a fairy godmother lying around, chances are you can’t magically make more money overnight. What you can start right away, though, is taking the right steps towards earning more money. Of course, you can always look for a new higher paying job, but you can also stay put. If you want to ask for a raise or a better bonus structure at your current job, start doing your research. Utilize tools like Glassdoor’s Know Your Worth feature. This tool gives you a custom salary estimate based on your title, company, location, and years of experience. This is a loose estimate, but it can give you an idea if you’re being underpaid. Poke around job search websites to see what salaries are being offered for similar roles, and use your research to support your pitch for a raise or for your next job interview.
If you feel your current salary is more than fair for your skill-set and years of experience, then it may be time to boost your resume. Consider taking an online course or earning a professional certification to prove that you are always learning new, valuable skills. Even if you’re not planning on asking for a raise or looking for a new job right now, you should get the ball rolling on increasing your worth. One of the only ways to ensure you have more money is to make more money.
2. Stop trying to follow other people’s budgets
You know all those helpful budgeting books and articles out there that swear up and down that their favorite budgeting method will solve all your problems? Ignore those. That sounds harsh, so let’s break this down a bit further. It’s great to experiment with those budgets, but if they don’t work for you, don’t force them.
Following a budgeting method that doesn’t work for your lifestyle will most likely lead to failure. Instead, consider taking the best parts from multiple types of budgeting methods and adjust them in a way that works for you. For example, the cash envelope budgeting system may be too messy for you and require too many trips to the bank. However, the overarching idea of having separate funds for separate expenses may appeal to you. Instead of carrying around multiple envelopes of cash, each week you can write down your budget and break it down by spending categories. Then, as you make purchases throughout the week, you can track how much you’ve spent in those categories. This method may take more discipline, but you might feel more organized going paperless. Take inspiration from popular methods and create a budgeting system that you can actually stick to.
3. Don’t be a part of the investment gap
Chances are, you know a lot about the wage gap. But have you heard of the investment gap? That’s right, women are falling behind in the investment world. When it comes to investing, women are more conservative than men. It’s time to change that. Planning for retirement, building an emergency fund, and saving for big expenses like a wedding or home can take up a lot of your resources. That being said, it’s so important to invest your money, especially when you consider the fact that women are better at it than men are. When women invest, their investments perform better than those made by men, which proves that even though investing your money can be scary, it’s a move worth making. Investing is one of the best ways to grow your money. Even if you invest conservatively (low-risk mutual funds all the way baby), you’ll be taking a step in the right financial direction.
4. Make your savings do the work for you
Investing your money for the first time can be overwhelming, and it’s smart to educate yourself before doing so. While you’re doing your research and making your investing plan, you should consider keeping your money in a high-yield savings account. High-yield savings accounts are often associated with online banks (they don’t have brick-and-mortar locations) but come with much higher interest rates on savings accounts than traditional banks offer. While one of these financial institutions may not be the right fit for all of your banking needs, you can put some of your money in a high-yield savings account while you decide how to invest it. These accounts usually have interest rates of around two percent or more (the APY on these accounts are subject to change), so your money will grow a lot faster than in a regular savings account. We rounded up a list of popular high-yield savings accounts that you can check out.
5. Save more for retirement
You know that man you love to pieces? It could be a friend, a family member, or a paramour. Well, it’s time to kick his butt in the retirement savings game. Why a need to be so competitive? Being the strong woman you are, you’re more likely to live longer than your male counterparts. Women on average are living six to eight years longer than men. In other words, you need more retirement savings than men do, because chances are you’ll live longer than them. So why is it that women have about half as much money saved for retirement as men do?
We dove deeper into this topic here, but long story short, you need to start saving more money for retirement now. If you’re not sure where to begin, chat with your HR department about what resources they provide. Many companies that offer 401(k) plans hire “Retirement Plan Advisors.” These advisory firms often provide free retirement planning advice to employees who participate in the retirement plans they manage. Your employer pays a hefty fee for this service, so if they offer it, you should take advantage of it.
6. Stop spending to make other people happy
Last but not least, you need to work on reframing your money mindset. Family and friends mean well, but if you feel pressured to spend your money to keep up socially or to increase your status, then it’s time for a bit of a money reality check. Letting peer pressure affect how you spend is something everyone has experienced at one point or another, but it’s important to set financial goals and protect them. The term protect may feel like an odd choice, but that’s what you really need to do. Trying to stick to your financial goals is not enough; if someone tries to get in your way of adhering to a budget, paying down debt, or saving for retirement, then you need to be protective of your goals. It sounds selfish, but there will be times you need to put your money first. Saying “no” to the occasional happy hour or girl’s weekend won’t destroy any true friendships, and can be the key to keeping your financial life healthy.