Realistic Financial Advice for Women Making Less Than $50K
The median income for single women in non-family households is $35,574, while the median income for single women who are the head of a family household is $49,214, according to the latest data from the U.S. Census Bureau. If you fall somewhere in this income range, you may find it hard to balance all of your financial priorities while covering basic expenses. In this “Financially Savvy Female” column, we’re chatting with Emily Sippel, CFP, financial advisor at Fort Pitt Capital Group, to get her best, realistic financial advice for women who are making between $35,000 and $50,000.
How can women in this salary range set a realistic budget?
To get started in setting a realistic budget, hone in on what your main priorities are and use the 50/30/20 rule as a basic budgeting guide. This rule is defined by 50% of your gross income being allocated toward needs — items such as housing, food, utilities, healthcare and insurance; 20% being saved across your emergency fund, retirement account and general investing account; and the remaining 30% earmarked for wants, personal care, entertainment, hobbies and subscriptions. You will want to review your subscriptions every couple of months and be sure to cancel ones that are no longer a priority for you, as they have a way of adding up over time, causing you to spend unnecessary money each month.
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How can they balance enjoying the now with saving for the future?
View each area of your financial situation as a bucket, and rather than focusing on filling one bucket at a time, try to allocate funds from each paycheck to each bucket. After paying your monthly expenses, split the remaining portion between an account earmarked for future savings and another as a “fun fund” to be spent on enjoying the items and hobbies you love in the present. Take solace in the fact that you are saving for your financial future incrementally, which can help bring you peace to enjoy your life day-to-day. The focus here is finding a balance so you can enjoy each chapter of your life.
What other advice would you give to women in this salary range?
Developing a budget and sticking to it is key because generally speaking, money always finds a home. This means that if you are not saving money or spending it on expenses that are important to you, it is most likely being spent on superfluous items or items that you may not even be aware of, such as subscriptions. By creating awareness around where each of your dollars is flowing, you will feel more control about directing them to the areas of your life that are most important to you.
GOBankingRates wants to empower women to take control of their finances. According to the latest stats, women hold $72 billion in private wealth — but fewer women than men consider themselves to be in “good” or “excellent” financial shape. Women are less likely to be investing and are more likely to have debt, and women are still being paid less than men overall. Our “Financially Savvy Female” column will explore the reasons behind these inequities and provide solutions to change them. We believe financial equality begins with financial literacy, so we’re providing tools and tips for women, by women to take control of their money and help them live a richer life.
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