Of Finances & The Wage Gap: Three Things Every Woman Should Know
The last thing you’d expect from a society that prides itself over diversity and equality is a pay gap between genders. On average, women tend to earn around 80% of what men do, and that’s a problem which requires fixing. Although the wage gap is much smaller in millennial women compared to the older generations, it still exists. This is a huge problem when women want to retire because, biologically speaking, the average female lifespan is longer than that of males, and since they’ve earned less during their lifetimes, they don’t have enough of a retirement fund to help themselves during their later years.
An astonishing 56% of women who are millennials are saving up for their retirement at the moment which is actually concerning. Retirement funds are extremely important which is why, if you’re a millennial woman, you need to know exactly how to save up for your retirement and be smart about the money you’re earning because your savings might be two thirds of your male counterparts during your retirement.
Make Sure Your Credit Card Debt Is Paid
One of the worst things you can do for your personal finance is to buy stuff on your credit card when you know for a fact that you don’t have enough money in your bank account to be able to afford it. The annual percentage rate in March was 17.67%, which is a record high, and it looks like things might go even more downhill from here on out. If you can’t purchase something without whipping out your credit card, it’s clear that you can’t afford it and should just walk away from it. Obtaining unnecessary debt is going to hurt you a lot in the long term, and it makes very little sense for you to be willing to take it on your shoulders. So, be wise about your purchases. We aren’t saying that you should be cheap, but try to treat yourself only once in a while and stick to a budget for your basic needs.
Build An Emergency Fund
An emergency fund, also known as a rainy day fund, is extremely important if you want to make sure that you never find yourself out of options if you lose your job or need a lot of money really quickly. Anything can go wrong at any turn in life, and in the current job environment, there’s no telling who’ll get fired next. Your best bet is to ensure that you’ve got a good sum of money stashed away in a separate account so that you can rely on it in times of need. If you’re in your early 20s, three months’ worth of salary should be saved up, and if you’re older, you should try and go for six years just to be on the safe side. Women lag behind when it comes to emergency savings, with only 56% having a rainy day fund while at least 70% of men have one.
Start Saving For A Retirement Fund
Your best option is to generally go for a 401(k) plan if your company is providing one because they’ll be putting in money along with you for your retirement. The savings are tax exempted, so you can put in as much as you’re comfortable with. The best thing about 401(k) is that your company will be matching the amount that you put into your savings – this will increase your bank account’s worth by a large margin over the years and assist you when you’re no longer earning. If you don’t have access to 401(k), you can plan your own retirement through an IRA (Individual Retirement Account). You need to realize that while you could easily get a loan for most things in life, like an education, a house, or even a car, you won’t be able to borrow money to ensure and maintain a peaceful retirement. On average, you can expect to live for around two decades after you’ve retired, and you’re going to need a whole lot of money if you want to spend all that time without going bankrupt. The only way to do that is to start saving early.
Being careful about your personal finances will make sure that you can spend a more comfortable retirement. It could be the difference between having to default or having tens of thousands in your bank account and not having a care in the world. It might not be easy, but it’s definitely necessary.
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