Women’s Worth Part 3 – Leaky Dollars

When we talk about gaining control of our finances, once we know where we stand as it relates to a balance sheet, the next step is to control our leaky bank account. For most of us, as long as there is enough money coming in each month to cover expenses, we rarely think about where it is actually going. So, here we go with developing a spending plan. We just had this conversation with a group of female Harvard graduates, and it was clear that it doesn’t really matter how much money we have, we aren’t managing where those dollars go.

Imagine, if you will, taking all the money you make in a month’s time and laying it out on your dining room table….in one-dollar bills. Pick up each dollar and say to yourself, ‘I earned you and I’m going to decide purposefully where you are spent’. Every dollar has a purpose, and you will choose where it goes. This is the best method I’ve found to stop leakage out of your checking account and dollars growing wings and flying away.

As women, we have so many demands on our time and money. We are nurturing and givers by nature, and I have clients that will give to friends and family members to their own detriment. With the demands on our time, it’s also difficult to find the time to manage our spending. What I will tell you, though, is it’s the most important step to getting ahead and finding a way to fund our future goals.

So, once you figure out where your money is going every month, pay yourself first. Let me say it again, pay yourself first. Begin with your retirement plan at work. If your company matches your contributions, contribute at least enough to get that match. Not doing so is giving away free money, and we don’t ever want to do that. After you’re contributing to your retirement account, look at your emergency fund. If you don’t have one, start one. Having an emergency fund will keep you from using credit whenever the unexpected happens, and it does, sometimes frequently — a car repair, an HVAC repair, or an unexpected trip that comes up.

From this point, you can look at the goals for the future that need to be funded and decide the best course to save for those.

But, my friends, it all starts with getting control of those leaky dollars.

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