Only 14% of women feel like they have their money under control. That’s roughly 1 in 10. That means for every 10 women you know, 9 do not have their money under control. You aren’t alone. Imagine if you became one of those women that knew what they were doing? Imagine the confidence you would feel if you knew that the decisions you were making with your money today were contributing to a plan that made sure you never ran out of money? Crazy right?
So why does the idea of managing your money make us anxious?
These are the reasons I hear every day:
- You were never taught how to manage money so you doubt your ability to get it under control.
- You have no idea how much money you need and you have no idea where to start figuring it out, but the idea of running out of money in your 80’s is terrifying.
- You know you need to think about budgeting, debt management, savings, investing and retirement planning but you’re overwhelmed on where you should start.
The reality is you have to get past the anxiety and do something because you don’t have ANY time to wait. When it comes to managing your money, time can be your biggest friend and your worst enemy. Think of that awful feeling of every year saying “This is the year I figure out how to manage my money;” and every year you’re another year closer to retirement and you never got around to getting started.
In my experience there are four major money myths to blame for you not being able to get started.
I’m going to take those myths apart for you, and give you a new, better way to think about learning how to manage your money. This will be the year you finally figure it out and put yourself on a path to financial freedom and finding peace with your money.
- debt management
- retirement planning.
That’s a lot of topics. It HAS to be complicated. Right?
Truth. Each of these segments is a multibillion dollar industry that has salespeople trying to sell you their products, their information, and their technology. They are making money off of your money. They have huge marketing budgets to spend to get in front of you and tell you they have the magic solution and you HAVE to buy from them. How are you supposed to know where to start? How do you know what is right for you?
The truth is that there can be lots of complexities to each of these segments, but it doesn’t need to be complicated. Within each, you can find solutions that you can use, that work in YOUR life, that can be simple and fit together effectively. The trick is finding the right ones.
Before you find the right ones, you need a plan. Think of it like a diet. You know you need protein, carbs, fats, vitamins, minerals and water. You follow various diet plans that tell you how to fit them all together to lose weight, feel better and be healthy. You may also need to tweak the diet a bit to compensate for the way your body works. You have an overall plan, and you make decisions every day about how you work the individual pieces into the food you eat.
The five components of personal finance work the same. You need a plan and you need to know how each segment is going to work in your life. You can’t save and invest correctly if you don’t know what you will need in retirement. You can’t budget to save and invest without looking at your daily needs and figuring out how to manage your debt. Make sense?
Personal finance does not have to be complicated. You need to find a plan that works for you that helps you put the pieces together.
The FAST Money Management System I built, is one of those plans. I designed it specifically for women. Over 10 weeks, I teach about each of the 5 segments and then I teach you how they work together. My favorite part of the plan is the one-page Personal Financial Plan. Each week we complete a section, so at the end of the class you have a one-page document that captures where you are, where you want to go, and what you have to do to get there.
When everything lines up, and you know where you are going and the role of each segment in your personal financial plan, you will have officially figured out how to manage your money. Imagine the peace and confidence you will feel.
So kick Myth #1 to the curb. Find yourself a plan that is easy to understand and get started!
Say you are 50 years old and you may or may not have money saved for retirement. There is a good chance you are going to see 80. That’s 30 more years of managing your money. This money myth that you are too old, needs to go.
Managing your money is not just about saving money for retirement. It’s about budgeting, debt management, investing and retirement planning too. All five pieces of personal finance management are going to be part of that 30 years. There ARE specific things you need to understand about money in retirement. Your money doesn’t work the same way in retirement as it does today.
In fact, one of the MOST frequent questions I hear is “how does money work in retirement? How do I budget and where does the money come from?”
Yes…if you start saving later in life, you may not save as much money as you would like, but that doesn’t mean you should give up.
There are things you can be doing to adjust your budget and spending now that will carry you through your retirement. There are also lots of things you can learn about how money works during your retirement years. You aren’t too old to learn about that.
What you CAN’T afford to do is let another year go by without figuring out exactly where you stand, what you need to plan for, and what you can do between now and retirement to make yourself as comfortable as possible.
Problem number one – do you have a plan to get out of debt? If not, how does THAT happen and how do you ever get to the point of a long-term money management plan?
Debt is only one piece of money management. Managing it, getting out of it, adding it, should all be part of your bigger plan. It has its place along side budgeting, saving, investing and retirement planning that I talk about in my FAST Money Management System.
You don’t have to get stuck in the mindset of “I’m bad because I’m in debt, and when I get good, I’ll allow myself to start taking care of my long-term needs.” Turn that mindset around! Make debt part of your plan.
Problem number two – time is your friend or your enemy. You can’t afford to wait to start saving and investing until your debt is paid off. The sooner you start, the further ahead you will get (time will be your friend). The longer you wait, the less wiggle room you will have to make changes that will impact your later years (time just became your enemy).
The sooner you start saving and investing, the more you will accumulate by the time you are ready to retire. It doesn’t need to be a lot to start, but every little bit will help.
If you have a plan that outlines how you are going to manage your debt, while starting to save and invest, imagine how you will feel because you won’t be stuck in the “I’m bad” mind set. You will be actively taking care of yourself TODAY as your savings and investment grow while your debt dwindles. Your confidence will have no bounds!
YOU NEED TO KNOW HOW TO MANAGE YOUR MONEY. Do you hear me yelling that loudly? Good!
90% of women will be financially responsible for themselves at some point in their lives, usually AFTER they turn 65. How does that happen? It will happen through divorce (50% of marriage end in divorce), death (women outlive men by an average of five years), or illness of your partner. I know…that’s a buzz kill, but it’s our reality.
Do you want to wait until after you are 65 when your back is against the wall to find out how this works? Absolutely not. You can do this now.
Another way to think about it? If you have a husband or partner, it is important that you be on the same page about your money. You need to understand how it works before you can get on the same page. Do you agree on what your lifestyle in retirement is going to look like? Do you have the same saving and investing plan to get to retirement?
Heck, does he/she know how budgeting, debt management, saving, investing and retirement planning work together? Do they have a plan? Learning about managing your money may not only help yourself, it could help your loved one learn more themselves.
Keep reading….now that you know the 4 WORST money myths you need to avoid, I’ve created a detailed FREE cheat sheet to help you avoid 5 common money mistakes I see people make.
My wish for you is that you be able to stop worrying about how to manage your money and create a plan that gives you the confidence and peace to never have to worry about it again. I created the FAST Money Management System. I would love for my plan to be your solution, but if it isn’t for you, please, do SOMETHING. Please take care of yourself!
I’ve been successfully managing my personal finance for over 20 years and made lots of mistakes along the way. The mistakes helped me build a better system. You don’t need to make the same mistakes! I’ve compiled a list of 5 of my biggest money mistakes over the years and I give you suggestions on how to avoid them.