As a single woman, long-term financial goals are probably not what you’re thinking about on a day-to-day basis. That said, you can start thinking about short-term financial goals and get on track to financial health even quicker. The best thing you can do to help your finances and ease your mind is to have a plan to be financially healthy as soon as possible.
Women are often given the advice to become your best self before getting into a relationship, well the same goes for your wallet. Your finances should be in tip top shape before getting into a big financial situation, like starting a family or buying a house.
Track Your Spending
Sometimes life can be unpredictable and it’s nice to let your hair down and roll with it. What’s even nicer is knowing where your money is going. In the age of technology, it’s becoming easy to track your spending. Download a money management app and set a budget so you’re notified when you’ve gone over your budget in a specific area.
Reach out to your credit union if you want more personalized money management help. If you’re trying to get your financial situation back on track, the most important step is research. Collect data on how you’re spending and then tweak your habits.
Have More Than One Savings Account
Having three savings accounts allows for more conscious financial planning. The three accounts should be broken up as:
- Short-term savings
- Long-term savings
- Emergency savings
This way, if your car breaks down you won’t have to pull money you thought would be used on a future trip to Aruba.
You may be thinking that three is overkill. If you are a savings newbie – start with one savings account. But start now.
Protect Your Credit (score)
Protecting your credit and credit score is important because a low score and bad credit flags you as high-risk. Having poor credit makes it very hard to improve your financial situation because it affects things like approval for loans, interest rates and more. This is the most important step to a healthy financial life.
Some rules of thumb are:
- Avoid applying for new credit cards
- Don’t close your oldest credit account if it’s in good standing
- Always pay on or before due dates
- Keep your credit usage under 30%
If you can stick to those rules your credit should be in good shape. To keep track of it, run a credit report yearly. Once a year you can run a free report through the big credit bureaus.
Automate Tentatively
If you’re living paycheck to paycheck, your first priority should be bills. The next priority should be savings. If you can’t yet afford to have a set amount go into savings automatically or as we like to refer to savings, paying yourself, don’t automate savings just yet. The most important thing is to pay your bills on time and to not overdraft any of your accounts. Once you get on top of bills and credit – then you can start automating savings. At this point, you should be automating a number that works for you. A good rule of thumb is to put twenty percent of your monthly income towards savings.
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