Things Every Woman Should Know About Her Finances
By : Joe Cook , Joe Cook Agency
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Regardless of where a woman is in her life , she should arm herself with the tools and knowledge she needs to confidently manage her finances . Every woman should know the basics of personal finance to avoid potentially costly consequences . In financial literacy matters , women tend to score lower than men consistently , according to a study by the FINRA Investor Education Foundation . 1
Financial literacy has an impact on wealth accumulation , retirement planning and stock market investing . The study showed that women were more likely than men to carry a credit card balance , pay only the minimum due each month , and incur late fees .
The FINRA study found that women with high financial literacy are less likely to en-gage in costly credit card behavior . Lower financial literacy increases costly credit card behavior by 8 %.
Here are five things every woman should know about her finances :
1 . Your credit report and score matter Your credit score affects whether you qualify for a mortgage or car loan and at what rate , as well as determining credit card limits and their interest rates . Lenders see those with higher credit scores as less risky , should you get better offers .
Each credit agency has its own scoring algorithm , which may not be the same one your lender uses when you ’ re applying for a loan . But you can – and should – still get a general idea of your credit score and ways to improve it .
Each year , download a free copy of your credit report at Annual Credit Report , which includes information on open credit card accounts , with on-time and late payment information as well as other debt information . You can get reports from the three major credit agencies : Experian , Equifax and TransUnion . Check each to make sure that the information is correct , that no one is fraudulently listed on your report and that all accounts listed are actually yours , since mistakes can occur .
2 . Calculate your total debt amount You should know about your total household debt , which might include student loans , mortgage , car loans and credit card balances , even if they ’ re on automatic payment schedules or your spouse pays the bills . It ’ s important to know how much money you owe and to whom . If you ’ re married and have joint accounts , you could be responsible for your spouse ’ s debt , even if you
know how you ’ re paying off the debt , how long it will take and the interest rate . Understanding these details allows you to make a better financial plan , possibly paying off the higher interest loans faster .
3 . Account for all your income sources For many people , their main income is their salary . But there are other income sources you should track each year so you have a full picture of the money coming into your bank account . That might include investment dividends , repayments on loans you made , side job income , tips , alimony , child support and tax refunds . This can help you adjust the amount paid in taxes each year , so you don ’ t overpay or underpay the government . But it also helps you understand your entire financial picture for budgeting and retirement planning purposes .
4 . Get a big picture of your spending Just as you should know what ’ s coming in , you should also know where your money is going . Whether you ’ re the type to balance your checkbook to the penny or just get a broad sense of budget categories , knowing some of the big-ticket items can help you understand your family or personal finances .
This is especially useful if you ’ re saving money for something big , such as a down payment or a special vacation . Also , it ’ s helpful to know what you ’ re spending so you can plan for retirement and investing . Knowing where your money goes means you can more easily make changes , if needed , to meet your financial goals and see if there ’ s any wasteful spending . For more information and advice about your unique financial situation , speak to a Nationwide financial advisor today .
5 . Make sure you access and track all accounts Access to your accounts is key , whether your accounts are individual or joint . It ’ s okay for your spouse to pay the bills and make the investments , as long as you have access to the accounts to stay up to date . If your spouse is managing the accounts , get a list with account log-in and password information and check them occasionally to make sure you understand what ’ s there . Even for your own accounts , it ’ s important to monitor them for any activity .
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