I used to have a fear of becoming the archetypical bag lady, but I have been making financial choices to prevent a destitute future. I remember the summer after graduating from college when I used a grocery cart to transport items back to my apartment. The next day I went hunting for a job and my first car. It was intolerable to deal with the pitying look of strangers. According to a new study "Women, Money and Power and Study," 49 percent of the women surveyed fear becoming a bag lady. A recent Shine article pointed out that a quarter of the women were financially successful with incomes of more than $200,000 a year.
Having a financial support system
One of the best decisions I made was to get married. According to the study by Allianz Life Insurance Company of North America, 56 percent of single women worry about becoming homeless, versus 43 percent of married women. If I wasn't married, I think I'd live with a relative since economic times are so uncertain. With the growing trend for multi-generational housing, it seems more people realize it's smart to have a financial backup.
Going beyond retirement savings
Evidently a lot of women worry about running out of money during retirement. One of the key things that will make me more secure about my retirement is having a paid-off house. I chose a 15-year mortgage instead of a 30-year mortgage when I refinanced so that I could pay off my house by the time I'm 55. With no mortgage or rent payment to make when I'm retired, I won't have to depend as much on my investments.
Being the household CFO
For me, being in control of our family finances gives me a sense of empowerment. However, I found that I feel less stressed when I run my financial decisions by my husband. My husband gives me different perspectives. He forces me to examine the numbers instead of making rash decisions based on my emotions or impulses. I don't fear becoming a bag lady because I know we will figure it out together even if I am the household chief financial officer with the final say.
Having backup, backup plans
I can relate to a lot of women who have concerns about their retirement preparedness. I, too, wonder about the future of Social Security, rising health care costs and unemployment. However, I try to make backup plans even for my backup plans. If Social Security fails me, I'll have my 401(k) plan. If taxes take a big bite out of my 401(k) and regular IRA, I'll have my Roth IRA plan in place.
Perhaps the most life-changing financial decision I ever made was to learn to be happy with what I have. I no longer strive to upsize or upgrade my home, car or lifestyle. I don't worry about becoming homeless or going into foreclosure because I live in a home I can easily afford. At the same time, I sometimes pretend to be broke by putting a chunk of my paycheck in savings and living on the remainder. It's better to choose to live on less than be forced to.
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