New Year’s Money Guide Part 2
Create a free investment plan with Ellevest* that crunches the numbers based on the realities of gender-based pay.
Set up your budget and stick with it
Setting up a budget can feel as painful as a visit to the dentist, but here’s a simple rule to make it easy.
Look at your take-home pay and divide it up with the 50/30/20 rule: 50% for needs, 30% for wants, and 20% for investing.
You may not be right on the mark when you start, but over time you’ll get there. One strategy that will help?
Pay yourself first. Invest a percentage of your after-tax salary every month through an automatic deposit so you won’t be tempted to spend that money. However, it is recommended that you do this only after building an emergency fund and not until you’ve paid off your high-interest debt.
Build wealth like a boss
This is the big resolution where you make a plan. Building wealth may sound unattainable, but instead of thinking about building piles of money, think about building money towards your future plans like buying that beach house, going on that dream vacation to Italy, or simply feeling like you’re “doing it right” and putting your money to work. Saving money isn’t enough. Why? Because the money that’s invested has the opportunity to earn more money thanks to compounding. Of course, the market will go up and down, but over time, the stock market has historically averaged a return over 9%. Don’t wait to do it. It’s not rocket science and you can start with as little or as much as you like. Try using an automated investment service like Ellevest, which has no minimums to begin investing and will recommend a professionally managed, diverse portfolio of low-cost index funds.
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*Ellevest clients must have a US bank account.