How Women Can Balance Multiple Financial Responsibilities

Senior Financial Advisor Naoko McKelvey, CFP®, AEP® was recently quoted in this article from GOBankingRates titled ‘10 Ways Women Can Save Money in 2023’, and wrote this blog post as a follow-up piece with her full thoughts:

Of course, it is important to take care of day-to-day needs, but it is important to put some of your income aside first for savings and/or emergency. I always recommend saving a percentage of your salary. That way as you get raises or bonuses, your savings increase, and you don’t have to think about changing it. Out of sight, out of mind! If it's not there for you to spend, it is more likely for you to readjust your immediate expenses accordingly. Also increasing your savings rate by 1% per year is an easy way to save without almost noticing that your income has been affected.

Here are some other areas that could contribute to potential savings:

Trimming the Fat

Look to make conscious choices on food bills. Uber Eats and DoorDash have become very popular for convenience but are very expensive and sometimes can be double the cost of what you would spend if you made your own meal at home. Shop at the no frills grocery stores, get your reusable bag credits and look for sales on items you use regularly by switching to no name brands. Buying brand name foods and labels can add up in expenses over time. Be careful about shopping at wholesale places. Sometimes we perceive getting a better deal buying in bulk but if you are not consuming what you buy and it is spoiling or expiring before you can finish, you might be throwing money in the trash.

Technology Overload

Look to trim down on unnecessary digital applications. Living in a digital world, it is so easy with a tap of a finger to “add to cart”. Consider the choices you are making on day-to-day items that may not be something you need immediately. Consider limiting or eliminating costs associated with phone apps and games that are “pay to play”, applications that cost monthly or yearly subscriptions like online music/radio, meal prep plans, magazine subscriptions, automatic beauty subscriptions or refills, TV subscriptions or premium channels, etc.

Many of our children have gotten accustomed to expenses that we deem as necessities due to our digital age and high tech culture with having smart phones, data plans, digital wallets, and apps. Consider giving them a monthly budget and helping them to understand how to make choices on what they want to spend that budget on. If they want food from DoorDash, maybe they can’t buy that extra game or buy more game coins that month. Help them be part of the solution and teach them how to manage their expectations. When my daughter was a toddler, she had no concept of money, but she did understand how many hours mommy would be away from her working to pay for that item if she wanted to buy something from the store. Most times, she would contemplate and decide that the item was not worth her “mommy time”. Now, as a teenager she is very mindful of how she spends her own money and how much she has work for something she wants and if it is worth giving up her free time. Having your children be a part of the solution will help to build better habits that they can use later in life.

Gym Membership

Gyms have become super costly depending on the gym and services they provide. Now, online, many exercise gurus have great free channels to cast on your TV for a great power yoga or Tabata workout. Turn your living room into your own personal training session for free and save that monthly subscription cost towards a new bathing suit and maybe a sinking fund for summer vacation or starter fund for a vacation home!

Have a Night In

Instead of having a night out, have a night in! Card games have been making a comeback. In the Midwest, a game called Euchre is very popular and just needs 4 players. You can buy a deck of playing cards for $1 at a Dollar Store. Still have fun but keep it on a budget. You can still throw a party but make it potluck and entertain in your home. If everyone chips in, you can find ways to make it fun and affordable without feeling restricted. Have food challenge party to limit ingredients to no more than 3 or a cost of under $5 or $10. You can find creative ways to make saving money fun and involve your friends or family so it can be a group effort. You can turn an ordinary evening of Taco Tuesday into a Fiesta with Mexican music in the background. Spaghetti isn’t just spaghetti if it is paired with Italian music in the background and bottle of wine under candlelight. There are many creative ways to jazz up an evening with little to no cost.

Setting Goals and Budgeting

Set some goals for how you want to cut your costs, and when you hit your goals, find a way to reward yourself. It doesn’t have to be something that costs money, but that might bring you joy or satisfaction of a job well done.

Creating a spreadsheet or a list of your recurring/fixed expenses and the frequency can help you budget better. You can even add the timing of your payroll deposits, so you know which check covers which bills for that time period and know how much is left over for discretionary spending or savings every month. I also recommend using technology that you are comfortable with, like calendar appointments or alarms to help remind you of when bills are due or need to be paid. If possible, set up automatic payments for expenses that are fixed and important like your mortgage, student loans, utilities, etc. Set up sinking funds for larger annual expenses to allocate monthly savings for your property taxes, auto or home insurance bills so you are never caught short. If you are paid bi-weekly, budget your monthly expenses on only 2 paychecks per month and you will have 2 extra paychecks throughout the year that can be used to invest or save. It will be like receiving a mini bonus twice a year!

Saving and Investing

The most important thing you can do is start saving and investing what you can without incurring more debt. Dollar cost averaging (investing a set amount of dollars per month or per quarter) is a great way to build a disciplined and consistent behavior. It allows you to buy more shares when market prices are low and less shares when prices are high. Over time, you will accumulate shares of a stock or investment and build a solid portfolio.

For busy women who are juggling work and family responsibilities, there are ways to set up periodic investment plans that are automated, so you don't have to make a decision on what to buy with your cash. It’s a form of automatic dollar cost averaging. If you are starting off, pick a low cost diversified index fund that fits your risk profile where you can set up an automatic purchase plan. If you are in a position to hire a financial advisor, he or she will help you with your systematic plan. Your 401(k) is another easy way to invest directly from your payroll and invests your contribution based on how you decide to have the funds allocated.

Working with a financial advisor to review your income and expenses and help you build a plan can be very useful. If you don't have the ability to work with a financial planner, start by building your own budget, put together a plan to pay down your liabilities, and start by allocating some of your income towards savings into your 401(k), IRA, Roth IRA and/or an emergency cash savings fund.

Investing can be as simple or as complex as you want to make it. I opt for simplicity. Know what you own and don't invest in products or instruments that are more complicated than what you can understand. The main key is to start saving and be diligent. If you want to be more serious, work with a financial advisor who is willing to partner and educate you. I have many clients that use our review meeting times as educational sessions to learn more about markets and just general investing so they can be more involved and more knowledgeable about what's going on. We discuss why we own what we own and why we don't own certain investments or positions. Build a partnership with your financial advisor so you can collaborate together.

If you have any questions about saving, budgeting, investing, or other issues related to personal finance, please do not hesitate to reach out. We are here to help.