What Woman Needs to Know About Personal Finance and Investing


As more women gain economic power, they must understand the fundamentals of personal finance and investment. Here are five crucial things that every woman needs to know about investing and personal finance.

  1. Know your current and future spending amount

Because we are currently in a time of skyrocketing inflation that’s expected to increase at least over the next year, it’s vital to consider how much you are currently spending and how much more you will likely be spending in the future.

Start by analyzing your current take-home pay and how much of it you spend either monthly or annually. From that amount, you can calculate how much money you are saving.

Next, project how much more you will be spending over the coming months, years and years.

After that, speculate on how much you might spend in retirement – and don’t assume you’ll spend less. Especially consider healthcare, which could counteract areas where you might anticipate spending less. It’s likely that your expenses may not drop off as much as you might think during retirement.

  1. Take account of all financial assets

First, take account of all your accounts, everywhere you have your money or financial assets, ascertain a total. Look at your checking, savings, retirements, and financial holdings (real estate, art, investments, etc.).

There are many tools online and financial aggregators that can help you keep track of how your money assets are growing or depleting.

  1. Organize your financial system

Create a financial binder that has all your important contacts for all of your financial accounts in one place.

Next, make sure you have other financial documents related to your estate, such as trusts, wills, etc., in one place. Make a habit of checking them every 3-5 years to ensure they are still up-to-date, or sooner when life events such as deaths, divorce, marriage, or births occur, CNBC advises.

Consider making an “eldercare” plan with parents before they become sick or incapacitated.

If you do all your financial work online, you may want to consider using password management software or an app to keep track, which will store your information securely. Some apps simplify this process by allowing you to input one password while managing the various secure passwords behind the scenes so that you don’t need to remember them all.

  1. Plan for the unexpected

Even now, the sharp spike in inflation is leaving many Americans struggling or unable to absorb the extra expenses, leading to accelerated depletion of savings.

Bloomberg Economics recently determined that, at its current rate, inflation will force the average American to spend an extra $5200 this year, an average of an additional $433 per month compared to last year with the same lifestyle and expenses.

Plan to reduce costs wherever you can to enable yourself to increase your contributions to savings and retirement investments.

The longtime rule of thumb is to build a cash reserve of at least six months worth of expenses (beyond what you put away in savings for investments).

  1. Invest now – don’t delay

The sooner you can begin investing, and thus, the longer your investments have time to grow, can make a huge difference in how much money you accrue by the time you reach retirement age.

It is crucial to adjust your lifestyle and living expenses to allow you to save beyond your emergency savings and have money available to place in long-term retirement investments.