Even though many women are starting to have a larger role in family finances and taking care of the money, there are some women who are still uncomfortable dealing with the finances. Here are five rules that can help you keep on the right financial track. (And you will find that these rules can help men, too!)
- Don’t let your partner control the finances: You are in a partnership. This means that you need to help make the money decisions. You need to know what sort of position you are in, and be involved in deciding where the money goes. Learn about how money works, and take an active interest. This also goes for stay at home partners: You are making a valuable contribution to the family finances by doing things for free that you would have to pay others to do. You deserve an equal say in the finances.
- Take care of your own needs first: To some, this may sound selfish. And for many women, the idea of taking care of themselves first seems wrong. However, you should make sure you are saving for your retirement before you take care of the college fund for your children. And you should also have access to money that you can save up — just in case something should happen to your marriage. Look into a spousal IRA for yourself, and consider a pre-nup to protect your assets.
- Stay away from co-signing: When you co-sign on a loan, you are assuming responsibility for it. If the person turns out to be unreliable, your credit score is lowered, and you are responsible for discharging the debt. You may feel bad, and you may want to help, but co-signing can be a bad financial move. Along the same lines, be wary about lending money to friends and family.
- Know your value: Whether in a salary negotiation or considering your “worth” to your family, know your value. Do research, and know how much your counterparts make in similar situations with regard to experience and education. Don’t accept less, just because you don’t want to rock the boat. (If the company really can’t afford it because of the economic times, that’s a different story.) If you know your value, don’t be afraid to be assertive. When you know your value, you are more likely to be valued. Your family should recognize your contributions is you are a stay at home partner, and value you as an integral part of the family.
- Take a risk or two: Many women are naturally risk averse. This shows up in money decisions, such as investments. If you want to grow your money more efficiently, you will need to take a financial risk or two. The good news is that you can use some investments, like index funds or proper diversification, to limit your exposure to risk, helping you grow your money without the emotional stress that comes with timing the market.
It might help to meet with a financial professional to discuss your finances, and set some reasonable goals. If you have a partner, this is a good thing to do together. Learning about how money works, and getting a little help with your finances can help you go a long way.