New Year’s Money Guide Part 1
Create a free investment plan with Ellevest* that crunches the numbers based on the realities of gender-based pay.
“There’s no instant formula to greatness here, no “simple steps,” because
that’s just not how life works, right? But from my years of experience
working on Wall Street, here’s my advice to help you achieve financial
confidence.” — Sallie Krawcheck, Co-Founder & CEO of Ellevest
Roll with life’s punches – Or be a good Girl Scout
Maybe your grandmother called it “Mad Money”; we call it the F.U. Fund (as in Ceelo’s song of the same name). It’s extra cash to make sure you have enough to cover your needs if you lose your job, break up with the person you thought you were spending the rest of your life with and need to move quickly, or any other emergency.
Your F.U. Fund should be 3 to 6 months of take-home pay in cash so that it’s easily accessible. Set up a separate account so that you won’t be tempted to dip into it. (Note: Ellevest offers an easy to access Emergency Fund Goal). But remember: do not start an emergency fund if you have credit card debt — pay that down first.
Master your debt – Don’t let it master you
Most of us will take on some form of debt in our lives, and not all of it is bad. Some debt, when paid on time, and with a low-interest rate, can help you build up your credit score. Think of a mortgage as an example of debt that can be part of a healthy financial plan. How you manage debt should take serious thought. Some people prefer to get debt — even low-cost debt — paid off and done with. One kind of debt that’s always bad is credit card debt: if you are carrying a balance on your credit card that means you are paying interest. If you want to lose weight, drop the debt. Pay it off as soon as you possibly can before you do anything else — even investing. (Read more about women and Debt here.)
Get free money from work – if it’s on offer take it
If your company offers a 401(k) retirement fund and a match, you should be taking advantage of it. Why? Because a 401(k) allows you to invest pre-tax earnings, which saves your tax bill in the long run. In addition, if your company offers a match they are basically giving you free, untaxed money towards your retirement. Make sure you’ve set up deductions to meet any necessary threshold to take advantage of your company match (get clarification from HR if you’re not sure). Now you’ve set up a retirement fund for your future that will compound over time. Boom. Have an old 401(k) from a previous job that is languishing away somewhere? Read what some women have done with their 401K accounts and roll that baby over right away.
- With Ellevest you can create a free investment plan that crunches the numbers using an algorithm based on the realities of gender-based pay. Do that today if you have a US bank account.
- Ellevest offers 401(k) rollovers as well as IRA transfers.
- Ellevest will conduct a review of your current 401(k) plan, including what you pay in fees, your investment options, and will make a personalized recommendation regarding whether rolling over your 401(k) to Ellevest is in your best interests.
- Ellevest will help you with the rollover process and charges no additional fees to rollover your 401(k).
Do you already have your emergency fund in place? Is the thought of starting an F. U. Fund motivating? My motivation is being able to travel home when needed. I’ve got be able to fly home at the drop of a dime.
“I want you to meet Ellevest because Black Women in Europe Blog™ is super excited to be working with them to start this conversation about women and money, and we may receive compensation if you become an Ellevest client.”
*Ellevest clients must have a US bank account.