Getting your first job is a significant milestone in life. But as with anything else, there are particular challenges you face as a new career woman. Learning to manage your money falls within those challenges. Unfortunately, for most young women who recently started their careers, the challenge starts with no prior experience managing their own funds or investments. Thus, this article will serve as enlightening tips for a new career woman.
MAKING MONEY DECISIONS WITHOUT PRIOR EXPERIENCE
Starting a career can be very stressful, especially when it comes to managing your money. Your primary source of income is your salary which may not be enough to cover your needs. To make matters worse, if you are a woman who wants to have a family someday, there are also the added expenses if a woman gets pregnant and has a child, which can further strain your finances. Giving in to stress and deciding to spend all your money without proper planning will leave you penniless and helpless. Your priority should be to invest for the future, especially if you want a family one day. You also need to accumulate money for an emergency fund to protect yourself from unexpected financial problems.
TRACKING YOUR EXPENSES
You might have a good salary, but chances are you may be spending most of it on unnecessary expenses like daily coffee runs, eating out with friends, clothes shopping, and miscellaneous things. Keeping track of your expenses and finding ways to cut them can help you save for the future and not worry about paying your monthly bills when they come due. You can refer to apps available on Android or iPhone devices that can help you track your expenses and manage your accounts.
SETTING UP A BUDGET
It’s essential to follow a budget to know how much you’re spending and how much you’re saving. Keep a tab of your spending and see where you can cut back so you don’t overspend on unnecessary things. You should also create a monthly budget that will help you set aside money for future expenses like buying a house or going back to school. You can either use a handwritten or online budgeting tool to help you keep track of all your income and expenses.
ENTERING THE REAL WORLD OF INVESTMENTS
Investing is a complicated concept and can be overwhelming at first. But you need to learn the basics of investing, especially if you want to build a good portfolio that will yield significant returns in the future. You need to open multiple accounts for retirement, your emergency fund and savings, and a brokerage account where you can purchase various stocks or invest in mutual funds. It would help if you also learned how to diversify your portfolio to reduce the risk of losing all your money. Diversification can make your portfolio more stable and profitable in the long run. You can start by putting your money into different types of funds with varying risk levels like bond funds, international funds, and emerging market funds.
LEARNING INVESTMENT TERMS AND PICKING A FINANCIAL ADVISOR
When investing, you must learn the basics of investing terms to know the difference between things like a margin account, return of capital, capital gains, and dividends. It’s also essential to pick a reputable financial advisor who knows what they’re doing. And most importantly, when looking for one, make sure your prospective advisor is properly licensed to provide financial advice in your country or state where they are located.
IMPORTANCE OF MUTUAL FUNDS
Mutual Funds are undeniably the most common type of investment vehicle used by most young women who just started their careers. It provides excellent liquidity where you can cash out your investment at any time. It also enables you with the flexibility to choose from a wide range of funds which can minimize risk and maximize returns depending on your financial goals. Most importantly, it is effortless to understand where you only need to invest in one fund and diversify your portfolio for free.
TAKE ADVANTAGE OF COMPANY BENEFITS LIKE HEALTH INSURANCE
It is essential for young women who just started their careers to take advantage of company benefits like health insurance. Health insurance will protect you if you get sick or injured by providing free medical consultation, treatment, and prescription drugs. It will also pay for hospital charges incurred by you and your family. And most importantly, it can protect you from financial ruin if a medical emergency happens while you’re still young and have no coverage yet. Even though it’s important to contribute some of the monthly premiums since this is what will keep the fund active, not contributing can incur penalties that can be a lot more expensive than paying for a service that protects you from major medical expenses.
GETTING A LIFE INSURANCE POLICY
Aside from health insurance, life insurance is another important benefit that women should take advantage of, especially if they have dependents like young children or a sick partner who depends on them financially. Getting a good life insurance policy can protect your family’s future by providing financial security if something happens to you. It will ensure that your children have enough money for their education and pay for other living expenses, so they don’t have to worry about being financially insecure in the future.
Your income and expenses are the first steps in becoming a financially responsible woman. It would help if you learned about investments to know how to diversify your portfolio and minimize risk while maximizing returns properly. And most importantly, you must take advantage of company benefits like health insurance and life insurance, especially if you have dependents who depend on you for financial support. Once you invest and pay for your insurance premiums, make sure you don’t spend more than you earn. Implementing the tips mentioned above will give you a good start in becoming financially responsible and achieving your financial goals without worrying about not having enough money to support yourself and your family.
