Financial Planner, author, and TV Host Suze Orman believes our problems with finance are manifestations of problems in our life and relationships. Quite often, many women delegate their financial security to a significant other or their spouse resulting in financial dependency that becomes obvious in times of death, divorce and illness.
Many women choose to ignore financial matters by getting someone else to do it for them or even worse, simply choose to do nothing. Ladies!!! Don’t get trapped in that old, self-limiting cycle. Here are 7 simple money tips that can help you manage your finances better.
Tip#1: Pay Yourself First
This means arranging in advance for an automatic salary deduction each month, with these funds bing channeled into the investment of your choice. The rationale: if you don’t have it, you can’t spend it. Practice dollar-cost averaging i.e. the technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price. More shares are purchased when prices are low, and fewer shares when prices are high.
Eventually the average cost per share of the security will become smaller and smaller. Dollar cost averaging lessens the risk of investing a large amount in a single investment at the wrong time.
Tip#2: You don’t need a lot of money to begin investing…
There are several different investment plans that you can start investing in, check your local Investment Companies, Commercial Banks, Merchant Banks, Building Societies, Mutual Fund Companies, Credit Unions, Insurance Companies and other investment agencies.
Tip#3: Choose a Licensed and Trusted Financial Planner
When deciding which financial planner to partner with, ask him or her some of the following questions:
What experience do you have? What are your qualifications? How much do you typically charge? Have you ever been publicly disciplined for any unlawful or unethical actions in your professional career? What is your approach to financial planning? Only after you have had this conversation and are comfortable with the responses should you sign on the dotted line.
Remember, you should only do business with a financial institution that has trusted and experienced financial advisors and with whom you can feel comfortable discussing your financial history.
Tip#4: Beware of how you manage your Credit…
Too often married women get left standing in the dust because they neglected to have savings accounts of their own!!……Then, suddenly they are single once again. The only thing in life that remains constant is change. In the event that life doesn’t go as planned, make certain that you are properly managing your credit cards by paying your monthly balances in full.
Also, be aware of the financial situation of your spouse. Understand that you may share responsibility for some of the debt.
Tip#5: Create a Rainy Day Savings Account…
The rule of thumb here is to keep preferably between 6-12 months of living expenses i.e. cash reserves in order to plan for a rainy day or to take advantage of any opportunities that may suddenly arise. When life’s challenges present themselves, be it loss of a job, the loss of a spouse or lifetime deal such as paying down on a home, you will be in a much better position to rise to the occasion.
If you don’t have the required amount saved, do not despair; remember that every successful person starts somewhere. Therefore, make a plan that will take you from where you are to where you want to be / ought to be.
Tip#6: Join or Start an Investment Club
If you are feeling stuck at the starting line, investment clubs are a good way to get started, as there is support in numbers. As part of an investment club, each club member contributes a certain amount each month to the investment club account. Then, using the funds collected, the club as a whole buys stock in particular companies. Over time, an investment club will acquire a “portfolio” of different stocks bought at different times. Members can be assigned various tasks such as researching specific companies and then reporting findings at the meetings of the investment club. The result: great friendships and exciting investment opportunities.
Also, consider investing in a mutual fund that is managed by a professional portfolio manager who pools all collected funds and invests in a variety of instruments. Get professional investment advice on the mutual funds that are most appropriate for you and your goals.
Tip#7: Get your Family in the Habit of Talking about Money & Keep Informed!!!
Talk about financial issues with your spouse and children. It is important to understand and appreciate the financial situation of your partner and ultimately that of your family. Ensure that the appropriate assets are held in joint names. A good understanding of the family’s financial situation on both sides can also help to build the relationship and improve both individual’s sense of security.
Good communication will also help in creating and implementing a successful financial plan. Also, by talking about money you will be able to teach your children the importance of saving and how to manage their finances at an early age.
Finally, it is very important to keep abreast of current affairs. Keep reading and educate yourself with the numerous resources that can be found in financial books, newspapers, and magazines and websites.
Some of us believe that finance is too difficult to understand. However we should all remember that all knowledge is good and can be used to improve our decision making. Keep informed and be committed to continued learning. This over time will contribute to the successful implementation of your financial plan.
General | admin, 10 May 10 | 
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