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(NEW YORK) – Women often talk about finding financial freedom, but single women need to think especially about being financially complete, according to Tiffany Aliche, a personal finance expert known to her hundreds of thousands of followers as “The Budgetnista” on social media .
“The goal is to really take a holistic view of your finances, not just” I want to be financially free, “” Aliche, whose new book Get Good With Money focuses on the 10 components, told ABC News “Good Morning America “. “Single women in particular should be over-sensitive when it comes to taking a holistic view of their finances and taking it step by step.”
According to Aliche, financial wholeness is achieved when the 10 core components of a person’s financial life are in order. These 10 components, according to Aliche, include budgeting, savings, debt settlement, earning good credit, learning to earn, investing, insuring, creating wealth, having a money team, and estate planning.
Ask yourself, ‘Do I have a budget? Large. What about a savings plan? “Aliche explained. “And collect these 10 steps along the way.”
For many women, the recession caused by the coronavirus pandemic has increased the financial burden this year. It has left millions of women unemployed and forced many women to use their retirement and savings accounts in order to be able to live.
In the midst of this crisis, Aliche has five tips to help women, and especially single women, become financially whole:
1. Make a name for your ‘future lady’ and plan for her.
Aliche made a picture of himself in retirement and called her “Wanda”. This is what she thinks about when making decisions about investing her money.
“A study was done that found that people do not retire because they are separated from their older selves. You don’t see yourself as older, ”said Aliche. “So my older me is Wanda, and I almost see her as my grandmother me or my future lady.”
Aliche said she thinks of Wanda, for example, when deciding whether to maximize her Roth IRA in addition to her 401 (k) retirement account.
“You now get tax breaks with a 401 (k) or a traditional IRA, but with Roth IRAs you get tax breaks later,” she said. “So I think, ‘OK, I have my match at work. Now let me take care of Wanda. Let me make the most of my Roth IRA because even though I don’t have a tax break on the front end, at Wanda’s age I’ll be able to withdraw that money and growth tax-free. ‘“
“I think to myself, ‘Do I want a tax break now for Tiffany who can work and is young, or do I want Wanda to have a tax break that is,’ Girls, don’t get me training here at 80, ‘added Aliche .
2. Share and save your money.
Aliche advises women to “save like a squirrel” by splitting their money before it even gets into their checking accounts.
“I want you to go to yourself [human resources] Department, go to your payroll and say, “Instead of putting all of my money into my checking account, you can put some of my money into my savings account,” she explained that you’re adding a direct deposit to your savings with the Account allows you to split your money “without having to worry about being disciplined”.
“And make sure the savings account is an online-only savings account as this is inconvenient,” Aliche added. “Inconvenient money is saved.”
3. Be strategic after filing taxes.
If you owe money after filing your taxes, Aliche recommends considering a meeting with an accountant to make sure you have properly executed your taxes.
If you’ve submitted correctly and can’t afford to pay the amounts due, Aliche says an accountant can help you organize a payment schedule.
When getting your money back, Aliche said you should take a close look at where you are in your life before automatically spending or investing the money.
“First and foremost, take care of your health and safety bills. Don’t use it for anything other than the things that ensure your health and safety, ”she said. “You need food and a safe place to live. Make sure this is a priority. “
When you’re ready for your immediate expenses, Aliche said, to make sure you’ve got your emergency fund financed.
How much you can save in an emergency fund depends on what industry you are in and how quickly you can replace your income, i.e. get another job, according to Aliche. She recommends saving for at least three months.
Only when you have made sure that you have saved money on your current and future expenses should you first consider paying off high-yield debt and investing the money last, Aliche said.
4. Know when to hire financial aid and when to tinker.
Aliche’s rule of thumb is to hire a financial advisor if you need to invest a fortune of $ 250,000 or more. Otherwise, the consultants’ fees are usually too expensive to be worth the money.
“The truth is, if you just got the financial foundations in place, you really don’t need any of this,” Aliche said. “If you have a retirement account at work and you create a target date account where you set the target date that you want to retire, that is done.”
“When you invest in wealth, choose a mutual fund that is similar to a target fund and set it up to invest, say, $ 50 a month,” she said. “If you had only done that, you’d be one step ahead of everyone else.”
Aliche said the exception to the rule is that hiring a paid certified financial planner can be worth the money. That’s someone you could hire for $ 100 to $ 500 an hour to review important financial decisions, such as: B. whether or not you will return to school.
5. Learn to make money.
“Everyone should know how to make extra money,” said Aliche of her “Learn to Earn” philosophy.
One way to make money outside of your full-time job, Aliche says, is to monetize your skills.
“I was a preschool teacher for over 10 years and when I did that I was teaching and babysitting,” she said. “What skills can you make money with when your site is busy?”
One way to make more money at work is to create what Aliche calls a “go me” file that records your accomplishments that make you an asset to your employer.
“If you are helping the company work for the money or if you are helping save the company you work for, put it on a file or write it down when you do a review or ask for a raise ask. You can quantify your ability to do so, ”she explained.
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