Whether you are clued-up in the money game or a complete financial novice, you won't have been able to ignore the reality that the world economy has been in the news lately. With a share market that resembles a rollercoaster ride and a property market that doesn't seem to know what it wants to do, it's no surprise that many women are left feeling dizzy at the thought of tackling their own personal finances.
And yet despite all this doom and gloom, it's important to remember that no matter what outside factors are impacting on your current financial situation, there are always enormous benefits to having your own financial plan.
It's unfortunate that women are still way behind men in the lifetime earnings stakes, but this is just one reason why you should be taking control of your own finances and starting to understand exactly what you can do with the money you earn so that you can make the most of it.
For many women, putting a personal income management plan into place is an arduous chore, and so it often goes undone and finances are left to chance rather than to plan. However, there are great paybacks to spending a little time allocating where your income goes, and simply making sure that you spend less than you earn so that you can invest your savings into appreciating assets.
It's unfortunate that women often think that dealing with their finances will leave them less money to do the things that they enjoy, or that they will have to go without to make any difference. But organizing your finances doesn't mean that you can't treat yourself, it simply means analyzing where you could be making better decisions with your money.
You'd be surprised at just how little you have to do to make some big differences to your personal wealth. Let's take a look at exponential growth and what can happen if you spend a little time organizing your finances and what some minor adjustments can do for you.
Say you currently take home $600 a week and save $60 of that money every week for 37 years. On an account which pays five percent interest every quarter, you would have saved $330,130 by the end of that time. That's a great amount for a small weekly sacrifice.
But what if we take into account the likely wage raises covering promotion and inflation over that period? If you were to receive an eight percent rise each year, and save ten percent of your wage over that time, by the end of the 37 years you would have accumulated $1,186,691 in savings, with the majority of that being made in interest.
It's now that you can start to see the true power of taking control of your money and how a carefully controlled expense management plan can truly begin to work for you. By analyzing what you do with the money you earn, and allocating a specific amount to a savings plan, you will be able to build your wealth and put yourself on an expedited path to financial freedom. We consider a money makeover!
Too often we as women think of makeovers only in terms of clothing, appearance and our homes. And we do a fantastic job in these areas. Well why not turn those talents to work on our personal finances? Dave Ramsey talks about this in his "Total Money Makeover: A Proven Plan for Financial Fitness". What do we need?
Start where you are and get organized. Put all your financial documents in one place. Having organized your information, assess your situation based on the facts - how much we own (assets and liabilities), income and expenses. Yes we like to be subjective however we need to have a cool hand here. During this step we will also be tracking our spending (on everything, including makeup and clothes). Then we develop a financial plan for the future. One that works!