At every age in a woman’s life, women should feel empowered to ask and answer essential money questions. The answers to these questions will better determine if women are on track to meet various financial goals and ensure they are able to keep themselves in good financial health no matter their age.
Broken down by age ranges, here are the essential money questions women at every age should ask themselves.
Money Questions Women Should Ask in Their 20s
Your 20s are essential for building money habits, so here are the questions you should ask at this stage.
Am I Building Good Budgeting Habits?
Women in their 20s will want to start and follow a budget. A budget helps track how much money you have coming in every month, how much is going out, the source of the money coming in and what it is being spent on.
If you are not building good budgeting habits in your 20s, this is a good age to see how you can improve them, said Rachael Burns, CFP at True Worth Financial Planning. Burns uses the example of a woman in her 20s who is buying a car. She will need to ask herself if this purchase allows her to stay within her budget.
Do I Have an Emergency Fund?
Asking the question of whether you have an emergency fund is critical for women of every age, especially in their 20s. This is a decade of life where most women are recent college graduates or working full-time jobs. Anything can happen, including unforeseen circumstances, and it helps to be prepared.
Women in their 20s should save between three to six months’ worth of living expenses in a liquid account, said Julia Pham, wealth advisor and CFP at Halbert Hargrove. This money should be used solely for surprise expenses that pop up. Keeping an emergency fund in a separate account also means there are fewer opportunities to spend the money on frivolous wants.
How Can I Improve My Credit Score?
Your credit score matters in your 20s! Women who work on their credit score at a young age receive the gift of time, said Sara DeSantis, accredited financial counselor at AFCPE. This enables women to build an almost perfect credit score when they need it the most.
How Can I Prepare For Retirement?
While many twentysomething women may not be thinking about retirement yet, DeSantis said this is the time to view compounding as a powerful investment strategy to grow your savings. The sooner women in their 20s start to invest and save for retirement, the more time their money has to grow.
Money Questions Women Should Ask in Their 30s
Here are the questions you should ask when you hit your 30s.
What Are My Financial Goals?
By the time women are in their 30s, they will likely be focusing on reaching financial milestones like buying a home, buying a car (if they haven’t already) or paying off any debt. DeSantis recommends women in their 30s set financial goals that are SMART goals: specific, measurable, achievable, relevant and time-based.
“Don’t just say you want to save money,” DeSantis said. “Be detailed and say why your reason is and how much you plan to save for this goal, and when it should be completed.”
What Do I Want My Career To Look Like?
Women in their 30s might have held a few different jobs by this age. DeSantis recommends creating a career plan. This plan will allow you to move up in your given field and adjust your finances accordingly to ensure you do not spend more as you start earning more.
What Will My Family Life Look Like?
This is an important question to ask at each decade, and age, in your life. While some women in their 20s may just be dating, others may be looking to get married and have a child in their 30s.
For those who are planning to get married, Burns recommends asking if you are having open and honest communication with your partner about your respective finances. Ask, and answer, how you plan to manage finances as a couple going forward. Women in their 30s planning to have children are recommended by DeSantis to start increasing their emergency fund.
Am I Maximizing My Retirement Contributions?
If you work for a company that offers a 401(k) account and/or matching program, take advantage of it. Pham recommends saving at least what they are willing to match and targeting an overall savings of 15% to 20% of your gross paycheck.
Money Questions Women Should Ask in Their 40s
Once you hit your 40s, there is a new set of questions to ask.
Am I Teaching My Children About Money?
Women in their 40s who have children should start teaching them simple principles of financial literacy once they’re old enough to understand. Pham cited a PBS report about how children can grasp basic money concepts by age 3 and money habits at age 7.
“Consider taking them to the bank to open their first account or discussing with them how they want to manage the birthday money they received from family,” Pham said. “Getting children comfortable with money early on and having open discussions with them will help them better manage their money later as adults.”
Am I Saving Toward My Child’s Education?
If you do have children in your 40s, Burns recommends asking if you are thinking about your goals for contributing to their education and putting a savings plan in place for them.
Do I Have Enough Financial Protection?
This is another question that applies to women at all stages of life, including in their 40s. If you are just getting married in your 40s, DeSantis recommends protecting your assets with a prenuptial agreement. Women buying a house in their 40s will need to determine how to financially protect their home with insurance.
How Can I Maximize My Income?
If you have not received a raise in a while or find your wages have been stagnating for a few years, it’s time to start increasing your earnings.
“If you’re working, ask how can I maximize my income? Can I try to get a raise or promotion or look at positions elsewhere?” Burns said.
Money Questions Women Should Ask in Their 50s
Here’s a closer look at what you should be asking yourself in your 50s.
How Does My Retirement Savings Look?
Look at your overall retirement savings. Burns recommends asking if you are on track with your retirement savings. If not, women in their 50s may need to start saving more aggressively. Burns also recommends asking if your savings are invested to maximize growth while keeping risk within your comfort level.
Do I Know About Future Healthcare Needs and Costs?
As more women continue to live longer, Pham said they will need to financially prepare for what it means to lead a longer lifespan. One critical aspect to learn more about is potential healthcare costs. These expenses can be hundreds to thousands of dollars for women in their 50s.
Whom Am I Caring For?
Some women may find themselves caring for their own children as they age into their 50s as well as their elderly parents. Pham recommends consulting with your aging loved ones and financial advisors to discuss the best way to plan if this sounds like your circumstances.
Money Questions Women Should Ask in Their 60s
As women get into their 60s, there are new questions to begin asking.
Who Inherits My Assets?
If something was, unexpectedly, to happen to a woman in her 60s, Burns recommends asking yourself what the plan is for who will inherit your assets. Women who have not already created an estate plan are well-advised to start creating one especially if they have any children.
Am I Ready for Retirement?
Some women in their 60s will be able to answer “yes!” to this question. Others may not be so sure. Burns recommends reviewing your retirement savings to see if you have enough money to retire. Women planning to retire in their 60s will need to fully understand where their retirement income is coming from, how much it will be, how much they will receive in Social Security benefits and how they plan to factor in healthcare costs.
If you’re not financially prepared to retire in your 60s, women may delay retirement until age 70 and receive the extra Social Security benefits payout.
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