Money guru’s easy steps to financial fitness

We’ve all been told the key to saving money and being able to retire early is following a strict budget but that might not be the best way.

New stats show that women are taking the biggest economic hit from the pandemic.

According to think-tank the Grattan Institute, women did it tougher than men in the job market during Covid restrictions and lockdowns.

They lost more jobs than men — almost 8 per cent at the peak of the crisis, compared to 4 per cent. And, those who became unemployed or voluntarily left work last year face longer-term impacts on their wages and career progression.

Six months out of work can add another $100,000 to the average $2 million disparity in lifetime earnings that exists between men and women with children in Australia, the report states.

While the report also argues that to reverse this impact the government should inject more money into things like childcare, financial expert Jane Walters believes women should take matters into their own hands if they want to achieve financial freedom.

“Many women have a subconscious fear about being ‘too’ ambitious or that focusing on money means that we are greedy or selfish,” says Ms Walters. “This stops us from doing what we need to earn and save money and can lead to self-sabotage in our careers or in our spending habits.”

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FINDING FINANCIAL FREEDOM

Ms Walters, who specialises in female finance, believes that financial freedom “means having enough money that you can spend your time the way you want to”.

And, the money guru adds, while that doesn’t necessarily mean retiring at 30, it does mean “having the peace of mind in knowing that you’re financially secure and have what it takes to look after yourself financially, no matter what life throws at you”.

The first step to financial freedom, says Ms Walters, is getting your outgoings in order and creating a budget, but this isn’t your traditional tight-purse-strings approach, it’s about getting crystal clear on your incomings and outgoings so you can enjoy the cash you have.

“Budgeting isn’t about restriction, it’s about being intentional about where you want to spend your money so it supports the life you want.”

Next, you need to review your household bills and make sure you’re getting the best value for money on things like energy, insurance and internet.

“It’s a good idea to shop around at least once a year for utilities, to ensure you’re not paying more than you should for basic services,” Ms Walters advises.

However – just like with budgeting – she believes it’s important to not be too restrictive.

“[Cutting household costs] isn’t THE most important thing – focusing on increasing your income is just as important, if not more, in creating surplus income.

“You can only cut so much from your budget, but there is no upper limit on what you can earn.”

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Money expert Jane Walters believes that financial freedom “means having enough money that you can spend your time the way you want to”.

THREE MOVES TO FINANCIAL FITNESS

Although Ms Walters is adamant that there “isn’t a golden number” when it comes to how much money you need to retire early, she does believe it’s within everyone’s reach.

“Women think they are just ‘not good with money’ when really it’s just a skill they haven’t learned yet,” she says. “Everyone is capable of learning about money, as long as they approach it with a growth mindset”.

These are the three steps she believes can put you on the road to financial freedom.

1. Know yourself

“Work out what’s important to you what your desires are, what lifestyle you want and what kind of career you want to pursue. It sounds like a funny place to start, but having financial freedom is about having the life you want and you can’t prepare for that if you don’t know what it is.”

2. Swot up

“Achieving financial freedom can be challenging at every age, but it’s worth putting the effort in to learning the practical aspects and improving your relationship with money. Start with the basics like budgeting and cash flow, then build your knowledge of investing and how you can create the income and assets that’ll support you.”

3. Take action

“Sometimes we get stuck in the researching and the thinking part and don’t act on it. The first time you invest will be scary. The first time you ask for a pay rise will be scary. Don’t let fear stop you from taking the steps you need to create financial freedom for yourself.”

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Originally published as Money guru’s easy steps to financial fitness