For career driven women, it’s very easy to get lost in the here and now – and not think about the long-term future. That’s why we’ve put together the perfect financial plan for working women.
Women are now scaling to historic heights never seen before in the workplace; in 2008, less than 12% of FTSE100 directors were female. By 2015, that figure had risen to 26%.
Many businesses are attracted to women’s high levels of organisation and ability to multi-task; we should never forget that everything Fred Astair did, Ginger Rogers did backwards and in high heels. That’s why so many people say that if you want something doing properly, you better ask a woman!
But while working women are highly focused on scaling the career ladder, not enough females are considering how their income should be boosting their future financial security.
Therefore, we have put together a short women’s financial plan, to help female professionals prepare for the future:
Step 1 – budget carefully
It’s amazing how many people (not just women) do not have full visibility or control over their monthly outgoings. Creating a budget that can break down essential versus non-essential spending is the important first step to understanding what proportion of their monthly income women can put into savings or investments.
Step 2 – review current financial commitments
Even within essential outgoings, it is still possible to save money. Working women should regularly review financial commitments such as their energy tariff, mobile phone contract and car insurance, to see if a better deal is available with another provider. More often than not, loyalty doesn’t pay, so it’s financially advantageous to switch around.
Step 3 – take out income protection insurance
Many women are the household bread winner, so to be unable to earn through injury, illness or unemployment would have a significant impact on their family. Taking out an income protection insurance policy offers peace of mind in case the worst did happen, and would ensure they were supported financially whilst getting back on their feet.
Step 4 – get a good pension in place
The Auto enrolment pension scheme is now well underway, meaning if women do not have a workplace pension in place already, it will be rolled out in the near future. However, the product chosen by their employer’s pension adviser may not offer the return they need to comfortably fund their retirement. It’s worth considering over paying on the minimum terms set under the auto enrolment scheme, to increase their pension pot size for later in life.
Step 5 – save for a rainy (or a sunny) day
In addition to securing a pension, women in the workplace also need to have savings in place, both to cope with unexpected bills now and to support their finances in retirement. Not only does this offer a safety net should a surprise outgoing come along, once it’s topped up to a certain level it can be used for treats – such as a well overdue holiday in the sun.
Women should always aim to have at least three months’ salary in their savings account, to be on the safe side.