We all know one: that woman who seems to breeze effortlessly through life on time, in control and impeccably turned out. Not for her the bad hair days, stained tops and transport mishaps which befall the rest of us. She’s always punctual, well prepared and super savvy about everything from the hippest hangouts to the shrewdest investments.
I’m afraid I can’t do much for your timekeeping and your wardrobe disasters and I certainly can’t turn you into a queen of cool but I can give you some advice on taking control of your finances. Here are my top four financial golden rules for smart women.
Could you tell me exactly how much you spend on necessities each month? If the answer is no then the very first thing you should do is sit down and tot up all your regular outgoings. Without knowing that figure, how on earth can you work out what is left over to spend on fun stuff each month? There are so many tools to help you these days that there really is no excuse for being clueless about your bank balance. For some budgeting apps that can help you take control, have a look here.
2. Spend mindfully
Smart women keep a close tab on all income and expenditure and only treat themselves to extras that they can afford. I’m not saying that you should suck all the joy out of your life – there’s always room for the odd night out supping cocktails or a lovely new pair of shoes – but I am arguing the case for mindful spending. We’ve all wasted money on membership of a gym which we never step inside or forgotten to cancel the Amazon Prime subscription that we don’t really need and those are the kind of unnecessary expenses which can quickly mount up. Making a few minor changes in your life such as taking public transport or walking instead of an Uber, walking a bit further to use an ATM which doesn’t charge you to withdraw cash or bringing your own lunch to work could help free up money to save.
3. Make goals
Who do you think gets more done – the person who comes in to work with a prioritised to do list which they can work through logically task by task or the colleague who arrives at work with a vague idea of what they need to get done and no plan of action? If you are to have any chance of getting where you want to go, you need to know what you are aiming for and that applies as much to financial planning as it does to any other area of life. Sit down and have a good, hard think about what you are trying to achieve financially. You might be at the stage where you wish to get debt-free, or further along the financial planning road but wherever you are, goals are key. Most people’s basic goals include some or all of the following: pay off debts, save an emergency fund to cover six months of living expenses in case a disaster strikes, save a deposit for a house, make regular contributions to a retirement fund and start an education fund for the kids. If you’ve got all that sorted, by all means aim for those luxury items like a second home or a yacht! If you are to keep on track though you need to strike a delicate balance with goals that are challenging yet attainable. Aiming too high will be demoralising and might just make you give up altogether.
4. Park your savings wisely
Smart women not only have savings but they make those savings work for them by generating compound interest. You need to look beyond the banks for the best opportunities for growth, especially once you have amassed a reasonable amount of savings. Many women shy away from investing because they have too many unanswered questions and think it is too risky but there are hundreds of different products out there with different levels of risk and some will be ideal for you. It’s well worth going to see a professional financial adviser who can give you a steer on where to park your savings to make passive income but within parameters of risk that you can tolerate.
Attaining financial security is not rocket science but it does take a bit of effort. Follow these four golden rules and you’ll be well on your way to being the envy of others, for your finances if not your style and punctuality!
Over the years I have helped hundreds of clients organise their finances. For me, financial planning is not limited to a single piece of advice and then moving on as is common in the industry. Instead, I like to build long term relationships and help people manage their finances to meet their needs as circumstances change. As a result, many of my clients have been with me for a number of years. They live throughout Asia and further afield but know that I am only a Skype or telephone call away.