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Money Management for Women: From Impulsive Purchases to Debts

When another crisis brings us face to face with financial problems, we think about competent management of the family budget, stability, and security. But they don’t teach us how to manage our finances at school, and not always at university. The rules below are the basics of women’s financial literacy.

#1 Tip: A Budget of Income and Expenses

Keep regular records of your income and expenses. Start by analyzing them monthly and drawing conclusions.

Any bank’s online account allows you to analyze all of your card spendings. In addition, many apps help keep track of income and expenses and can convert card payments into an app. This is the best way to control personal expenses.

Divide your spending budget into essential and non-essential, both in content and amount — this way. You can separate the important and mandatory from the secondary and extra.
Significant expenses are those that cannot be avoided. For example, utility bills, food costs, loans, education of children, etc.
Non Essential expenses can include visiting cafes and restaurants, going to exhibitions, theaters, etc.

When it comes to managing your money, it’s always important to be aware of your outgoings and expenses. More often than not, you will be paying a monthly or yearly fee for something that is no longer serving you; wasting money unnecessarily is something you should nip in the bud whilst you can. With the Wesley Financial Group you will soon be able to find an exit strategy out of your timeshare, so that you can start saving more money and reducing your outgoings. If you ever feel trapped in a certain financial situation, you should always know that there will be a professional who can help you to get out of it.

Setting priorities between essential and non-essential expenditures is individual for each. Every month analyzing the actual expenses, you can determine their feasibility and minimize unnecessary spending.

Women’s financial literacy often risks being drowned out by emotions. All the same, the current era of consumption now and then pushes us to rash purchases, making decisions on emotions. Budget analysis eliminates such problems and teaches a rational attitude to money, regardless of monthly income.

By understanding “where I am now,” you are laying the foundation for your financial strategy.

Need to buy something? If you take out a $1500 loan for an important purchase, there’s no harm done. But remember: Before you spend any money, it’s important to analyze your expenses.

According to statistics, women are prone to buy impulsively but 24% of women can’t resist a sale!!! But men still spend 18% more.

By the way, despite women being more likely to spend money, their money management skills are more developed than men’s ones, because men have 10% more debt!

#2 Tip: Develop Money Management Skills

After figuring out your actual expenses, make a plan for next month’s income and expenses. Consider the obligation of essential expenses and set limits on non-essential costs. Make it a rule not to go over the limit in non-essential expenditures.

Most importantly, immediately allocate 10% of all income per month and set it aside. This is a simple but important formula for financial literacy — such savings will start building your financial foundation.

After allocating 10% of your income, make a spending plan. Expenses should be less than the remaining income, or at least they can be equal. You can always find 10%, even from a minimal income budget. Having worked out all the expense items in your budget planning, move on to the next step.

#3 Tip: The Actual Execution of the Income and Expenditure Budget

From all revenues, try the 20/30/50 rule. Save 20% to form a financial foundation (start investing) and 80% of monthly income from a budget for consumption. There are enough techniques to manage 80% of income effectively.

The easiest is to pay utility bills and loans and divide the balance into 30 matching envelopes. Open only one envelope each day and live on it. No other envelopes should be opened, and if any part of the daily amount is leftover, add it to the 10% for investments.

There are more complicated distribution options, such as spending money during the month only on essential expenses and leaving all non-essentials for the end. It is very important to take regular measurements of the total costs within your allotted items of expenditure to analyze and set consumption limits.

The goal of the first month is to learn to set aside 10% of your income. Not to spend it, but to save it. The goal for the following months is to increase the percentage of money saved from 10% to 20%.

Analyzing and consuming wisely and working to increase your monthly income is just a small part of the possibilities for growing your financial well-being. Like any business, financial management needs consistency and regularity.

Whatever books on financial literacy for women you read, you won’t get the magic spell or the pill from them. You will only master financial management when you learn how to set and implement long-term financial goals.

#4 Tip: Goal Setting

Motivating long-term goals are financial goals for 20 years, ten years, five years, three years. Such goals can be: creating a fund for your children’s education in 10-15 years, generating passive income of a certain amount in 5-10 years, etc.

Everyone will have different goals, but these goals will allow you to move faster and seek additional opportunities to implement them as soon as possible.

Setting strategic goals gives you the energy to implement the monthly steps.

#5 Tip: Emergency Fund

An airbag is a tool that gives you confidence in your future and ensures you through a period of job search, income changes without losing your standard of living, etc.

The formula for an airbag is simple: you have to have an amount of 6 monthly budgets of all your expenses available to get you started. Thus, any external change in your income level for six months guarantees the maintenance of your current standard of living and provides an opportunity to find alternative sources of income or revise your spending priorities in the projection of six months.

Effective skills are the basis for a successful life.

Cher