Ask, Know, Grow: Financial Questions Every Woman Should Ask
Personal finance is just that: personal. But for many women, even knowing where to begin can be a challenge. Below, we discuss a few of the questions women should ask themselves to help secure their financial futures.
What Are My Financial Goals?
Consider the various financial aspirations you might have for yourself and your family in the next one, five and 10 years. Perhaps it’s a down payment on a residence or a retirement nest egg, or saving for several college degrees.
How Much Am I Spending vs. Saving?
Keep track of your income and spend for a month and learn about your spending profile: your savings – are you saving enough? Floor – what percentage of your income are you spending on discretionary items, in other words, what percent is left for savings and investments?
Do I Have an Emergency Fund?
An emergency fund is key to financial security. How many months of living expenses do you have saved in case you lose your job, get sick and are unable to work without income, or encounter some other kind of catastrophic event? Try to shoot for three to six months’ worth of expenses.
Am I Maximizing My Retirement Contributions?
Are you maxing out your 401(k), an IRA, or some other retirement account that allows you to put away money during your working years with an employer match of some sort or a tax benefit? Learn the limitations on your contributions. Contribute as much as possible.
What Is My Investment Strategy?
Are you putting money in a diverse mix of stocks, bonds and mutual funds whose combined risk and return fits your tolerance for volatility and your investment horizon? Do you know the basics of the stock market – what a stock is, what a bond is, and how these financial instruments can help your money potentially grow over time?
How Am I Managing Debt?
Are you planning to pay off high-interest debt such as credit card balances? What’s the plan for student loans, a mortgage or other debts? If you have any high-interest debt, then this should be reduced.
What Are My Credit Scores and Reports?
Check your credit scores and reports periodically. Do you know the components that make up your credit score? A high credit score means you will more likely get a loan or a good interest rate.
Am I Prepared for Major Life Changes?
Think about how you will be affected when life’s big changes occur: you get married, have a child, get divorced, or change jobs. Is there a plan to handle such transitions?
Am I Seeking Professional Financial Advice?
Do you use a financial professional or planner? It might be useful to take professional counsel if your finances are complicated.
What Are My Tax Liabilities?
Learn your current local, state and federal tax status and how your tax liabilities will change with financial decisions. Are you getting all the tax deductions and credits that you are entitled to?
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