Home' Trinidad and Tobago Guardian : October 25th 2015 Contents 5
SBG10 PERSONAL FINANCE
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt OCTOBER 25 • 2015
When it comes to money,
women face some higher
hurdles than men. Women
tend to live longer, so their
money needs to last longer.
Since women are also more
likely to spend time out of the workforce for a number
of years while caring for children or aging parents,
they often have less money than men to begin with.
And, of course, women tend to earn less than men;
about 78 cents for each dollar earned by men (as of
2013) and about 83 per cent of men s salaries (based
on median weekly full-time earnings in 2014).
Given all these factors, it s critical for women to
be smart with their money so that it can serve them
well and last throughout retirement.
Here are five powerful money moves for women.
Get out of debt
and stay out of debt
According to various studies, women are much
more likely than men to carry credit card debt, though
their average balance owed is smaller. In other bad
news, a 2012 study found that women are more likely
than men to carry a credit card balance, make the
minimum payment on their credit cards and be
charged a late fee.
This is all dangerous, because credit cards often
charge outrageous interest rates of 23 per cent or
more annually. While plenty of women carry no
revolving debt, plenty of others owe $10,000, $20,000,
If you owe $10,000 and are being charged 25 per
cent in interest, you re looking at $2,500 per year in
interest expenses alone. It s extremely hard to get
ahead financially when high-interest rate debt keeps
pulling you deeper and deeper into a hole.
Make it a priority to get out of debt as soon as
possible and to stay out of debt. Don t dismiss the
idea of getting a second job for a while or cutting
back significantly on your spending.
Live below your means
A great way to stay out of debt and to get ahead
financially is to live below your means. You might
want to do a little budgeting in order to achieve this.
Write down all your regular sources of income and
then keep track of all your spending over one to three
months. (Add in the cost of infrequent expenses, too,
such as home insurance payments or property taxes.)
Learn where your money is going and then make
adjustments to your spending so that you re getting
by while also saving and investing for the future.
There are lots of relatively painless ways to spend
less and save more, such as brown-bagging a few
lunches per week, cutting back on costly fancy coffees,
and mowing your own lawn.
If you re a smoker and can quit, you can save thou-
sands of dollars per year---while adding years to your
Don't leave your money
management to others
Many women regret having left all the money
management up to their spouses when he or she
dies. Don t let yourself end up one day both grief-
stricken and facing the daunting task of figuring out
where your investments are and how to manage
Ideally, go over household and long-term finances
with your partner regularly. Know how much money
you have where and how to access it.
Being on top of money matters in your household
might also keep you from discovering one day that
your partner has racked up lots of debt or been a
poor financial manager.
Learning about personal finances and how to make
good money moves isn t hard, and you might even
find that you like it.
Be sure to have a
According to the 2015 Retirement Confidence Sur-
vey, only 28 per cent of unmarried women have tried
to calculate how much money they will need to have
accumulated by the time they retire versus 43 per
cent of unmarried men.
A survey reports that half of the women who
responded were worried about whether their money
would last through retirement. Don t be one of these
women. Take the time to formulate a plan. Figure
out how much money you will need in retirement
and where it will come from. And don t just count
on government pension.
Your plan might include income from a fixed imme-
diate annuity, income from stock investments and
dividends, interest income from bonds, and/or rental
income from properties you own. Be sure to have an
emergency fund, too, to protect you in case of a
financial disaster such as losing a job or facing a
costly medical issue.
Aim to have between three and nine months worth
of expenses (including housing) readily accessible in
highly liquid funds during retirement.
Save and invest effectively
Once you know how much you ll need in retire-
ment, you ll likely need to save and invest aggressively;
especially if you re no longer in your 20s or 30s. You
might use an online calculator to help you with that.
By tweaking the amount you plan to save each year,
how long your money can grow, and the average
annual growth rate you expect, you can arrive at a
For example, if you have $50,000 in retirement
accounts now and can sock away $8,000 per year,
while aiming to average eight per cent in annual
growth, you can end up with more than $600,000
in 20 years. AP
Take the time to formulate a plan.
Figure out how much money you
will need in retirement and where
it will come from. And don't just
count on government pension.
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