Women make up half of the population but only receive 3% of all business loans and own just 7% of businesses in the U.S. This makes it hard to know what steps to take next or even whether you’re making the right decisions in the first place. While women are out-earning men in more fields than ever before, they’re still not saving as much money as their male counterparts.
To help with this, here are 5 practical pieces of advice by William Schantz for women who want to take control of their financial future, whether they’re first-time investors or need to get back on track after some missteps.
5 Pieces of Advice for Women by William Schantz
1. Create a Budget
Once you’ve established your income, it’s time to figure out where all your money is going!
Create a budget (if you don’t already have one) that includes a realistic monthly income and expenses, down to each dollar. You will be surprised by how much debt you have or how much goes toward entertainment and dining out. You might even see a good opportunity here—perhaps cutting cable will free up enough cash so that you can put more toward retirement or other goals.
2. Create an Emergency Fund
No matter how good your financial situation is, it’s essential to have a rainy-day fund at your disposal. If you lose your job or face another emergency, having a financial safety net can help you get through financially rough times without debt.
William Schantz suggests setting aside three months’ worth of living expenses in an accessible savings account as an emergency fund—but if that seems like too much money to put away, even saving $1,000 will be better than nothing.
3. Build Wealth Through the Stock Market
If you’re a female looking to invest, make sure you’re using low-cost index funds. Investing on your own is not as easy as it seems, especially since women generally live longer than men and typically want more money at retirement age. That means they need to save more.
As per William Schantz, investing in stocks can be risky if you don’t know what you’re doing. While there are plenty of ways to invest without any risk, one option is through an exchange-traded fund (ETF), which tracks an index like the S&P 500 or Dow Jones Industrial Average. Because ETFs track indexes, they tend to be less volatile than individual stocks—and thus less risky—but still offer investors exposure to different industries and sectors worldwide. They also tend to have lower expense ratios than mutual funds, so you keep more of your returns for yourself!
4. Create Multiple Income Streams:
Earning extra income is a smart way to safeguard your financial future; it’s also an excellent way to create a little extra cushion. Setting up additional income streams on top of your regular paycheck can protect yourself from any significant dips in your day job and take advantage of unanticipated revenue.
According to William Schantz, this is an easy way to hedge against an economic downturn by putting aside additional money that can be used during tough times, like a layoff or medical emergency.
5. Know Your Goals
You can’t get where you want to go if you don’t know where you are. Many women go through life without a clue of their long-term goals or how to achieve them. Start making financial plans now and ask yourself what’s really important.
William Schantz’s Final Thoughts
As a woman, it’s a good idea to examine your finances regularly. This is especially true if you are working or have children—tasks that can make time-consuming money management difficult at times. To save money and achieve financial independence, try some of these strategies in your day-to-day life