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How can you be financially prepared as a woman

How Can You Be Financially Prepared As a Woman?

profileRuth Lum

Sadly, most of us eat it or wear it! 

I say this with regards to our money and where we spend most of it on – food and merchandise.

A while ago, I caught up with a friend who’s 23 this year, and just found out she is going to be a mother.

The biggest sentiment I took away from our conversation?

TL;DR: Without These Good Habits, She Was Not Financially Prepared for This.

  1. Budget every week
  2. Invest in yourself
  3. Save before you spend
  4. Know your net worth
  5. Don’t give in to the FOMO
  6. Make retirement your priority

If life throws you a curveball as such, and you choose to proceed with keeping the child, will you be financially ready for all that is to come?

While there are schemes like the Baby Bonus Scheme to help with some of these costs…

The cost of giving birth is still pretty high in Singapore…

Not forgetting the cost of raising a kid as well.

Speaking from the perspective of a young female adult with the goals of attaining financial freedom somewhere down the road, it’s pretty undeniable that we ladies are known to be more notorious for our extreme spending habits.

Perhaps some of us even take a back seat in making key decisions for finances because we assume the more passive role in our relationships.

How then, as a woman, can you make sure that you’re financially prepared and secured if and when the time comes?

Be it unexpected pregnancies, illnesses or *gasp* a divorce where you’re left stranded?

Personal finance is not all that daunting if you get down to it. These are the top 6 successful habits women should adopt in order for their future to be financially savvy and secure:

1. Budget Every Week

Understand Your Budget

It is important to understand where you are spending your money in order to control your expenditure, this can be segmented into Fixed and Variable expenses.

You can start by using this simple budgeting template to reduce your expenses to only 30 per cent of your salary!

Know Your Income

If you’d like, you can use a personal expense tracker from tracking your income (salary, investment incomes etc.), to tracking all expenditure (daily spendings, rent, and taxes).

Don’t forget to include things like non-recurring items and arbitrary purchases, which usually go forgotten but actually contribute quite a bit to eating away at your gross income.

Besides understanding your monthly cash flow, you can take a step further and look into getting additional streams of income.

One potential way to earn extra income would be through side hustles.


2. Invest in Yourself

By this, I don’t mean buying yourself that overly-priced pair of sneakers, or that branded bag that might look good but fails terribly in functionality.

Everyone should know their value and the importance of upgrading themselves.

It is important to dedicate time for self-development and widen your repertoire of core skills.

Given how accessible courses are today, it is virtually possible to learn anything that we want.

And we are even sponsored to do so

Increase your chances of being able to capitalise on the good – and possibly lucrative – opportunities which come your way.

3. Save Before You Spend, and Automate Your Savings

Drill this into your head, because it seems to be one of the most valuable mindsets when you approach the topic of personal finance.

If you seek to be a financially savvy woman, pay yourself first before paying for expenses.

Automatic transfers are one of the simplest ways to save money and build wealth effortlessly.

You can automate your monthly salary allocation for convenience, where different amounts of money will be deposited into different accounts.

While the 50-30-20 rule is the general rule of thumb, we can adjust it to suit our needs better.

Once you start saving and building momentum, it gets easier.

But that comes after you’ve set up an emergency fund.

4. Know Your Net Worth

While this is not the only metric that matters, knowing your net worth is one of the ways you can check in on your progress towards your personal financial goals.

It acts as a good measurement of your financial situation and gives you a better grasp of your financial progress and goals.

Are you hoping to BTO or make a big investment soon?

If yes, you would want to make sure that you’re gearing your savings toward the right assets and also ensure that whatever debt balances present are not hindering the process.

5. Don’t Give in to the FOMO

Are you able to resist the FOMO (fear of missing out)?

Definitely easier than it sounds.

Be it joining the coolest company for a fancy after-work dinner, a round of drinks or keeping up with the latest fashion trend to be the “seen” one amongst the crowd…

Know that you can always say NO.

With the way society is wired, we tend to let our lives revolve around negligible, materialistic things that could end up accumulating $114 a month in wasted money.

6. Make Retirement Your Priority

Based on a 2018 study by HSBC, here are their key findings:

  • More than half (54%) believe they will struggle to cope financially if their partner dies, compared to 47% of their global peers.
  • 41% of Singapore’s working-age women either do not know how much they are putting aside for retirement or have not started making any contributions at all. This is in stark contrast to Singapore men, of whom just 31% are in the same position.
  • Slightly over a third of women in Singapore believe they are saving more than their partner. Only one in five (21%) women pitch their financial knowledge as higher than their male partners.

What this clearly shows is that women are falling behind in terms of preparing for their retirement.

In order to be a financially successful woman, start your retirement planning early in your careers (I’m speaking to all my fellow millennials out there!) to maximise the effect of compounding.

Don’t miss out on the easiest way to get rich!

How Can You Be Financially Prepared As a Woman?

8 in 10 Singaporean women leave major financial decisions to spouses.

Which is a worrying statistic, given how we might be more financially literate than we think.

While finance itself might seem like a huge topic, financial planning can be done more easily than we think.

And the best thing we can do for ourselves is to get started.

It is only by doing that that we can work towards being independent, financially prepared women.


About Ruth Lum
Breaking down 'chim' finance knowledge into manageable pieces so you don't have to.
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