Women and Money--Steps to Financial Independence
Wipe your paws elsewhere!
Thread Starter
Join Date: Dec 2004
Posts: 3,672
Women and Money--Steps to Financial Independence
I've always been financially independent. I've earned a good living, always owned my own home. I've never allowed anyone handle my finances nor depended on anyone other than myself to take care of my financial needs.
That meant that when I decided to end my relationship with my alcoholic boyfriend, finances didn't stand in my way. I am fully capable of taking care of myself and my children.
I believe women lose their independence and a lot of freedom and power when they allow others to take care of their financial needs--for whatever reasons.
Along those lines, I thought it might be a good idea to get folks thinking about ways they could become financially independent. I've been reading Jean Chatzky's "Make Money--Not Excuses" and thought I'd share some interesting statistics.
One way to become financially independent is to always pay yourself first. That means making a commitment to save a percentage of every paycheck. Most financial advisers advise their clients to save 10% of their salary. That may be too hard for folks who are just starting out, but there's nothing wrong with setting the bar a little lower. The important thing is to get started saving today.
Here's an interesting chart from Jean's Chatzky's book. It's a comparison of how much money a person could amass in 1, 5, 10, 20, and 30 years based on the average American salary of $44,398 a year (this assumes no raises):
If you save 3% of your salary a year:
1-year savings: $1,332
5-year savings: $9,845
10-year savings: $22,529
20-year savings: $69,580
30-year savings: $174,017
If you save 5% of your salary a year:
1-year savings: $2,219
5-year savings: $16,402
10-year savings: $37,532
20-year savings: $115,916
30-year savings: $289,899
If you save 10% of your salary a year:
1-year savings: $4,439
5-year savings: $32,811
10-year savings: $75,072
20-year savings: $231,884
30-year savings: $579,938
Pretty impressive numbers, huh? Even in these tough economic times, I'll bet nearly everyone of us wastes 3%, 5%, even 10% of their income on needless luxuries.
A few non-essentials that immediately come to mind are:
Daily lattes
Lunches out
Dinners out
Cable/satellite TV
High-speed internet
Call waiting
Caller ID
Call forwarding
Three-way calling
Cell phones
Manicures/pedicures
Bottled water!!!
Impulse purchases
According to David Bach, author of "Start Late, Finish Rich," the average family spends $500 a month on dinners out, $272 dollars a month on lunches out, $80 a month on satellite TV, $80 a month on cell phones, $45 a month on high-speed internet, and $150 a month on miscellaneous phone charges. That's $1,127 a month that folks are spending on things they really don't need--or nearly $40 a day in non-essential spending."
Let's say you don't splurge on a daily latte. You practice "self control" and only spend $9 twice a week on lattes. That's still $72 a month, $864 a year, and a whopping $8,640 in coffee over 10 years! What's wrong with good old Maxwell House? Or if you can't live without Starbucks, it's much cheaper to brew it yourself at home.
So for those folks having trouble paying themselves first, what luxuries can you eliminate so you can take steps today to become financially independent?
That meant that when I decided to end my relationship with my alcoholic boyfriend, finances didn't stand in my way. I am fully capable of taking care of myself and my children.
I believe women lose their independence and a lot of freedom and power when they allow others to take care of their financial needs--for whatever reasons.
Along those lines, I thought it might be a good idea to get folks thinking about ways they could become financially independent. I've been reading Jean Chatzky's "Make Money--Not Excuses" and thought I'd share some interesting statistics.
One way to become financially independent is to always pay yourself first. That means making a commitment to save a percentage of every paycheck. Most financial advisers advise their clients to save 10% of their salary. That may be too hard for folks who are just starting out, but there's nothing wrong with setting the bar a little lower. The important thing is to get started saving today.
Here's an interesting chart from Jean's Chatzky's book. It's a comparison of how much money a person could amass in 1, 5, 10, 20, and 30 years based on the average American salary of $44,398 a year (this assumes no raises):
If you save 3% of your salary a year:
1-year savings: $1,332
5-year savings: $9,845
10-year savings: $22,529
20-year savings: $69,580
30-year savings: $174,017
If you save 5% of your salary a year:
1-year savings: $2,219
5-year savings: $16,402
10-year savings: $37,532
20-year savings: $115,916
30-year savings: $289,899
If you save 10% of your salary a year:
1-year savings: $4,439
5-year savings: $32,811
10-year savings: $75,072
20-year savings: $231,884
30-year savings: $579,938
Pretty impressive numbers, huh? Even in these tough economic times, I'll bet nearly everyone of us wastes 3%, 5%, even 10% of their income on needless luxuries.
A few non-essentials that immediately come to mind are:
Daily lattes
Lunches out
Dinners out
Cable/satellite TV
High-speed internet
Call waiting
Caller ID
Call forwarding
Three-way calling
Cell phones
Manicures/pedicures
Bottled water!!!
Impulse purchases
According to David Bach, author of "Start Late, Finish Rich," the average family spends $500 a month on dinners out, $272 dollars a month on lunches out, $80 a month on satellite TV, $80 a month on cell phones, $45 a month on high-speed internet, and $150 a month on miscellaneous phone charges. That's $1,127 a month that folks are spending on things they really don't need--or nearly $40 a day in non-essential spending."
Let's say you don't splurge on a daily latte. You practice "self control" and only spend $9 twice a week on lattes. That's still $72 a month, $864 a year, and a whopping $8,640 in coffee over 10 years! What's wrong with good old Maxwell House? Or if you can't live without Starbucks, it's much cheaper to brew it yourself at home.
So for those folks having trouble paying themselves first, what luxuries can you eliminate so you can take steps today to become financially independent?
Last edited by FormerDoormat; 12-01-2008 at 04:40 PM.
Yield beautiful changes
Join Date: Feb 2008
Location: A home filled with love
Posts: 1,710
I gave up:
TiVo
2,000 square feet
Buying books that I can borrow from the library
Girl's Night Out (it has since become Girl's Night In - my friends come over for book club discussions, homemade cookies, and hot chocolate on Tuesday nights)
Buying coffee (instead of making it myself)
Delivery pizza
Text messaging
Clothes shopping for stress relief
In return I am rewarded with the power self-sufficiency.
I can take care of myself and my child.
I can give us food, shelter, warmth, and love.
Whatever happens with my AH, I will never again abdicate financial responsibilities to him (or any other man).
I will buy/rent a home that I can afford.
Drive a car that I can make the payment on.
Have my own credit cards, bank accounts, savings, 401K, and IRA.
TiVo
2,000 square feet
Buying books that I can borrow from the library
Girl's Night Out (it has since become Girl's Night In - my friends come over for book club discussions, homemade cookies, and hot chocolate on Tuesday nights)
Buying coffee (instead of making it myself)
Delivery pizza
Text messaging
Clothes shopping for stress relief
In return I am rewarded with the power self-sufficiency.
I can take care of myself and my child.
I can give us food, shelter, warmth, and love.
Whatever happens with my AH, I will never again abdicate financial responsibilities to him (or any other man).
I will buy/rent a home that I can afford.
Drive a car that I can make the payment on.
Have my own credit cards, bank accounts, savings, 401K, and IRA.
Member
Join Date: Jan 2006
Location: Los Angeles, CA
Posts: 5,075
I don't carry credit card debt. I save and buy my cars outright, keeping them an average of 12-14 years.
Some things like high speed internet, Blackberry, etc. are part of my business needs.
I treat myself to lattes most days, but buy my shoes at Payless.
I have always paid myself first.
For me it's about having a budget and sticking to it. What I spend it on within that budget isn't as important as not going over.
Some things like high speed internet, Blackberry, etc. are part of my business needs.
I treat myself to lattes most days, but buy my shoes at Payless.
I have always paid myself first.
For me it's about having a budget and sticking to it. What I spend it on within that budget isn't as important as not going over.
Wipe your paws elsewhere!
Thread Starter
Join Date: Dec 2004
Posts: 3,672
I don't carry any credit card debt, either. And I buy my shoes at Payless, too. I keep my cars until they are no longer drivable, but I do finance them. Something I still need to work on....
Yield beautiful changes
Join Date: Feb 2008
Location: A home filled with love
Posts: 1,710
No credit card debt, here, but I am a sucker for nice shoes.
Fortunately, I have enough pairs from my time pre-financial independence to carry me over until I can once again afford to indulge.
For now I just walk by and drool.
Fortunately, I have enough pairs from my time pre-financial independence to carry me over until I can once again afford to indulge.
For now I just walk by and drool.
Wipe your paws elsewhere!
Thread Starter
Join Date: Dec 2004
Posts: 3,672
I think it's also important to maintain balance. By that I mean, I have an active savings and investing plan, but I occasionally allow myself to enjoy the fruits of my labor as well. So, if I've met my savings and investment goals for the month or year, I'll go ahead and buy something special just for myself.
For me, it's usually something for my house, like artwork or a new piece of furniture.
For me, it's usually something for my house, like artwork or a new piece of furniture.
Occasional poor taste poster
Join Date: Jul 2005
Posts: 2,542
I don't carry cc debt but I do finance my car, pay extra on the principal each month and will have it payed off in a year. I own my home and have more equity than I owe on it. I don't do lattes out but I brew starbucks at home. I typically don't spend much on myself but I have treated myself to a Caribbean trip the past two years and I think I'll keep that up because diving is my new passion..... oh and I cut way back on my guitar habit, only have 4 right now 
Member
Join Date: Dec 2005
Location: in the present moment
Posts: 2,060
I don't have any cc debt, but I am starting a new business and it is so tight, that I never remember to save. Its all re-invested into the business.
I love Jazzman's idea of paying more than the monthly car payment. I owe 2 more years and would love to clear that payment out.
I bought an espresso machine and make my own lattes at home, where my business is based. I drink waay too much cafeeine now, but i can't remember the last time I paid for an expensive coffee out. Thanks for adding up the intangible assets for me. I just feel wealthier already knowing how much I saved not drinking starbucks!
All in all, not much in savings but a promising futrure nonetheless....
I love Jazzman's idea of paying more than the monthly car payment. I owe 2 more years and would love to clear that payment out.
I bought an espresso machine and make my own lattes at home, where my business is based. I drink waay too much cafeeine now, but i can't remember the last time I paid for an expensive coffee out. Thanks for adding up the intangible assets for me. I just feel wealthier already knowing how much I saved not drinking starbucks!
All in all, not much in savings but a promising futrure nonetheless....
Wipe your paws elsewhere!
Thread Starter
Join Date: Dec 2004
Posts: 3,672
Cigarettes are another BIG money waster. In his book "Start Late, Finish Rich," author David Boch says "a pack a day keeps retirement away." Smoke pack a day at ~ $7 per pack and you waste $210 a month or $2,555 a year.
But it's much more than $2,555 a year. He goes on to say give up the habit, pocket the $7 a day, invest it in a retirement plan that yields a 10% annual rate of return and this is what you'll get over time:
In 10 years: $43,017
In 20 years: $159,467
In 30 years: $472,702
In 40 years: $1,328,057
In 50 years: $3,638,122
How many people blow $7.00 a day? That's a Big Mac, large fries, and a large drink at MacDonalds, or lunch at the lousy cafeteria downstairs at work.
But it's much more than $2,555 a year. He goes on to say give up the habit, pocket the $7 a day, invest it in a retirement plan that yields a 10% annual rate of return and this is what you'll get over time:
In 10 years: $43,017
In 20 years: $159,467
In 30 years: $472,702
In 40 years: $1,328,057
In 50 years: $3,638,122
How many people blow $7.00 a day? That's a Big Mac, large fries, and a large drink at MacDonalds, or lunch at the lousy cafeteria downstairs at work.
Member
Join Date: May 2008
Location: MO
Posts: 743
Thanks for the tips! In preparation for going it on my own I've given up pedicures (easier now that it's winter, but may hurt more when the flip-flops come out), taking the dog to the groomer for baths I can give in between trims, drive-through.......we did go to McD's a couple weeks ago after not being there for over a month and it didn't taste nearly as good as I remembered. I've also given up driving around aimlessly to avoid my own home and buying something from every co-workers child for fundraisers, believe it or not that adds up!
I haven't had credit cards in years, but did take on a stupid car loan that I should have known better than. I have spent way too many years not paying attention, this has been a real eye-opener as to how much money I've wasted. Another tip I was given was to carry a small notepad and write EVERY cent you spend for a week without altering your normal patterns. I was shocked at how much running in to pay for gas and picking up a soda or candy bar costs when that sort of spending becomes a habit.
I haven't had credit cards in years, but did take on a stupid car loan that I should have known better than. I have spent way too many years not paying attention, this has been a real eye-opener as to how much money I've wasted. Another tip I was given was to carry a small notepad and write EVERY cent you spend for a week without altering your normal patterns. I was shocked at how much running in to pay for gas and picking up a soda or candy bar costs when that sort of spending becomes a habit.
Member
Join Date: Jul 2007
Location: pa
Posts: 260
Great tips,
I gave up my home,pets and my son's 6 years ice hockey sport and just about everything else we used to do.
I was one of those "women" who depended on her husband to be
the breadwinner so I could be home with my kids.
Today I work 45 to 47 hours a week and still have to
depend on my family to help with groceries.
One of the last things AH said to me was "you'll never make it".
Yeah I guess not my salary barely supports 3 people,but it is a heck
of alot better than being with him.
I am teaching my daughter not to make the same mistakes I did.
Always have enough money to take care of yourself .
DO NOT DEPEND ON SOMEONE ELSE TO SUPPORT YOU AND YOUR CHILDREN.
I wish someone would have told me that when I was younger!!!!
I tell the kids someday we will have our own home again and get new kitties.
You gotta have faith.............:ghug
I gave up my home,pets and my son's 6 years ice hockey sport and just about everything else we used to do.
I was one of those "women" who depended on her husband to be
the breadwinner so I could be home with my kids.
Today I work 45 to 47 hours a week and still have to
depend on my family to help with groceries.
One of the last things AH said to me was "you'll never make it".
Yeah I guess not my salary barely supports 3 people,but it is a heck
of alot better than being with him.
I am teaching my daughter not to make the same mistakes I did.
Always have enough money to take care of yourself .
DO NOT DEPEND ON SOMEONE ELSE TO SUPPORT YOU AND YOUR CHILDREN.
I wish someone would have told me that when I was younger!!!!
I tell the kids someday we will have our own home again and get new kitties.
You gotta have faith.............:ghug
Member
Join Date: Oct 2008
Location: Someplace USA
Posts: 415
These are great tips!! When I was divorced for the first time and I had two kids I don't think I had cable until my oldest child was about 12, she was about 6 when he left. My two kids and my youngest sister who was 4 years older then my oldest, who I raised for a few years. They all talk about how those where the happiest times of their lives.
We had "Movie Night" Friday night I would order a pizza and rent a movie, sometimes we would get ice cream with toppings. I was really poor but they had no idea.
I would only work 30hrs a week so I could home school them. I would take them to free re-enactments, most educational stuff is really cheap. We also did lots of church activities.
Those are some ideas for people with littler kids...
PS. My kids just said: Old hot air poppers are the best!! and Setting up tents all over the house!
We had "Movie Night" Friday night I would order a pizza and rent a movie, sometimes we would get ice cream with toppings. I was really poor but they had no idea.
I would only work 30hrs a week so I could home school them. I would take them to free re-enactments, most educational stuff is really cheap. We also did lots of church activities.
Those are some ideas for people with littler kids...
PS. My kids just said: Old hot air poppers are the best!! and Setting up tents all over the house!
Member
Join Date: Dec 2006
Location: Stumbling toward happiness
Posts: 4,706
I'm a huge fan of the book "Your Money or Your Life" and also of the writer Barbara Stanny, who's written a series of books including one called "Prince Charming Isn't Coming" -- about how anyone can stop living in the fantasy world of some-day-my-financial-prince-will-come and start building up their own financial life. Helped me a LOT, even when I didn't think I had any money to save.
I love the web site www.simpleliving.net too -- including its huge discussion forum on how to save money and simplify your life. I've gotten a ton of great ideas out there and probably saved thousands as a result.
I love the web site www.simpleliving.net too -- including its huge discussion forum on how to save money and simplify your life. I've gotten a ton of great ideas out there and probably saved thousands as a result.
Fulldresser4
Join Date: May 2007
Location: Mid-Michigan
Posts: 531
I'm a big couponer/refunder. I try to match the sales with coupons. I know alot of people that say it takes too much time to clip and sort, but I know that when I go shopping I consistently save 50 to 60% off my bill. And I NEVER pay more than pennies for toothpaste, toothbrushes, or shampoo. I am very blessed to live in the land of double coupons, at least a few stores around here double up to $1.00 which gives me $2.00 off on many items.
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