When’s the last time you took a look at your finances? We recently had the opportunity to speak with Allison Engel, director of women’s market strategy at Northwestern Mutual, about how women can make smart choices with their money. Thinking about your financial situation is important no matter what your relationship status is, but especially now more than ever as women stay single for longer.
Personally, I know personal finance is something that I can always get better at, and I am sure I am not the only one.
In our conversation, Allison gave us a few tips to help keep your finances in check:
- Each person’s situation is different.
There is no one size fits all situation to finances, so it is important to meet with a financial planner. This way they can create better solutions fit for what you need.
Each individual is different; all at different stages. What are your goals? What are your financial goals? Have you gone through a budget exercise? Do you have a plan? Where is your money going? These are questions that you need to be asking yourself and figuring out with a financial planner.
- Follow the 20 60 20 rule.
That means 20% in savings, 60% on living expenses (rent, groceries, bills etc.) and 20% on fun. Allison believes that you need to spend some of your money on fun, especially since you’ve earned it with your hard work! Why not live a little?
Imagine your financial plan like a puzzle- all the pieces need to go together. There are many things included when it comes to your savings, like an emergency fund and retirement, so it’s important to keep those in mind. Those three categories can be broad!
- Educate yourself
Before meeting with a financial planner, you should at least have some basic knowledge of things so you know where the conversation is headed. Tools like NorthwesternMutual.com are great because they have articles about basic 101 knowledge of finance.
- Communicate with your spouse.
These are the things you should be talking about:
- What kind of savers?
- What debt are you bringing to the table?
- What are your financials
- Do we have a vision for retirement look like?
Answering those four questions is important to make sure you both are on the same page about how to manage your finances.
- Follow the Spend, Grow and Protect Rule
Spend: go spend your money
Grow: create a plan to grow your wealth
Protect: life insurance or disability protect your future and current financial situation
Overall, these five pieces of advice will help you be in better control over your money. Make sure this year you get organized with your finances so you can better prepare for the future.
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