1) She knows exactly what her income is
How much did you get paid last week, last month, or last year? Do you know? Do you earn money from interest or shares in your account? How about those side jobs where you sell items on Etsy or Facebook? You may write a blog – what about that income? A successful woman knows exactly what her income is. She makes certain that every cent is working for her – as productively as possible. Her understanding where her money comes from makes guesswork a thing of the past
2) She makes a budget (and sticks to it)
The European Journal of Social Psychology 1 found it takes an average of 66 days to form a habit such as working out, eating better, or – in this case – sticking to a budget. Not only does a successful woman understanding her income sources, but she also understands her expenses. She will document in the beginning of the month her planned expenses and then, at the end of the month, compare what her actual expenses were. She will get in the habit of knowing this information, so she can take appropriate action when she gets off track.
3) She automates her finances
With her budget created, she automates her transactions. Having all your bills set up so that they are automatically paid (drafted from your bank account or charged to your credit card) will help ensure that you never miss a payment again. She doesn’t waste time or energy keeping up with due dates because she knows everything is covered. She knows her income and her expenses – and by automating her bill payments, her only job is to make sure the appropriate amount of money is in her account. She may even get crafty by charging everything on her credit card to accumulate points or build credit; but she makes certain that the credit card is paid in full each month.
4) She understands how to eliminate discretionary spending
Easier said than done, right? A successful woman doesn’t let money control her happiness. Think about it – have you ever tried to justify why you made a purchase (but secretly knew you could have lived without it?) Yep, that’s what we’re talking about. A successful woman understands the difference between wants and needs. She knows not to live on credit and doesn’t purchase above her means. She takes a close look at her spending and identifies whether the purchase is something she really needs or something she could do without. She understands the importance of building wealth, not just the appearance of wealth. Just because she can buy something, doesn’t mean that she will.
5) She pays off debt, then pays herself first
Debt will always hinder your ability to achieve financial freedom. If you are in debt, especially from credit cards, make it a priority to pay those balances as quickly as possible. Credit card debt is one of the most expensive kinds of debt you can have. Paying that high interest takes away from what you could be saving and earning. A successful woman will make paying her debt her priority; then, and only then, will she pay herself. She first sets aside money from each paycheck to reduce debt. That way, the temptation later in the month – for those discretionally expenses – won’t be there.
6) She checks her credit report annually
At least once a year she tunes in to the three major credit bureaus and checks her credit report. She’s not checking her credit score (while that is important), she is checking the reports for accuracy. If there is an errant account or something fraudulent on her report, she will catch the inaccuracy and work to get it corrected. Everyone is entitled to a free credit report each year and issues on credit reports can negatively affect your credit scores. Credit scores are typically used for determining things like how much interest you pay on your mortgage or car loan, and even how much creditors will lend you. It can be painful and cause difficult problems if you have a bad credit score. A successful woman will keep a close watch on her credit.
7) She doesn’t just save, she invests
Of course, having an emergency fund is something everyone should have; but once that is done, the successful woman moves on to investing. She puts her money to work – for her. Investopedia gives an example of two types of investors.2 “A risk-averse investor is happy with a modest 3% annual rate of return on her portfolio. Her present $100,000 portfolio would therefore grow to $180,611 after 20 years. In contrast, a risk-tolerant investor who expects an annual return of 6% on her portfolio would see $100,000 grow to $320,714 after 20 years”. A financially successful woman understands the power of compounding interest and takes advantage of it.
8) She teaches her children how to make smart financial decisions
A financially successful woman will teach her children how to manage their money. You teach your children how to cook and how to clean up after themselves. You’ve already taught them a great variety of skills. Why wouldn’t you teach them to be financially wise? Armed with that skill set, they will learn to be more independent and less likely to come running to you to bail them out. Also, by doing this they will understand the power of money and its value; which in turn, will save you money in the long run.
9) She schedules time with a financial advisor
She understands what her strengths are and knows that while she may have knowledge about her financial situation, she can always learn more. She routinely schedules time with a financial advisor to make sure she’s on the right track. Even the strongest go-getters out there don’t have all the answers, all the time. Having a reliable financial advisor can help navigate sticky situations as well as help make sound financial decisions. And remember, you don’t have to be wealthy to get help from a financial advisor.
Securities offered only by duly registered individuals through Madison Avenue Securities, LLC (MAS), member FINRA/SIPC. Advisory services offered only by duly registered individuals through Global Wealth Management Investment Advisory (GWM), a Registered Investment Advisor. MAS and GWM are not affiliated entities. Investing involves risk, including the potential loss of principal. Hypothetical examples are provided for illustrative purposes only; it does not represent a real-life scenario and should not be construed as advice designed to meet the particular needs of an individual's situation. Results from the use of these concepts are no guarantee of your future success.