Finance for Women
Module No: Add a touch of gloss

Congratulations.

I am so proud of your staying power. All the rewards come to those who just keep going. The fact that you have made it this far tells me that you are truly committed to a powerful financial future.

I know it is not the most pleasant of things to dig into your financial psyche and habits. It’s a very daunting thing. That’s why personal finance is an area where many take real control. But with just a little bit of courage, the rewards are life-changing. Well done for having that courage.

We have a couple more exercises to do and then you will have a clear picture of your current financial situation. From that point, the point of knowing exactly where you are, there are many places you can go. I hope that Finance for Women part 2 will be one of them for that is where you can begin to plan the financial future you want from this position of strength you have created.

All the hard work is done, be sure to use it for the best possible results in the future.

So lets recap where you are now.

You know your Net Worth, your expenses, your income and your net monthly profit or loss situation. But what does it all mean to you in terms of actual financial progress?

Part One

Becoming Financially Balanced

There are two main stages to becoming financially balanced. Some people are happy to get to the first stage, others move on to the second stage and a very few people add a third of their own design.

The first big stage is the one you have been diligently working to since week one and it is made up of four parts. It is to get to a point where:

  1. you spend less than you earn, ie you have a monthly net profit.
  2. you are putting 10% of what you earn aside each month to contribute towards your future,
  3. you have put a certain amount of cash aside in an untouchable emergency fund
  4. you have a plan to repay any debt you may have

If you do nothing else after this course, these elements will bring you a certain amount of stability and security. The first two we have already looked at in great depth. By now you will not only know what your monthly net profit/loss figure is but you have the tools to improve it while still living a life you enjoy.

In this last module, we will look at the second two items, the setting up of an emergency fund and a plan to repay any debt.

When you have done these two exercises, you will have some financial security in your emergency fund and you will continue to add to it with your 10% per month. And if you have a debt situation you can make your first target the elimination of that debt.

What is an Emergency Fund?

An Emergency Fund is just that, it’s a fund that you keep for emergencies. Very often we go along on a monthly basis paying our bills and keeping ahead (just) until something happens. You have to take sick leave from or loose your job (or you choose to change a job) which means you have a short period of reduced income or inconsistent income. This can put unnecessary additional pressure on an already pressured situation.

The key to financial peace of mind and being able to sleep at night without financial worries is to have a little put aside. How much should that be? Action item 1 later on will help you calculate it for you.

It sounds too simple but I cannot even begin to communicate the difference it will make to your whole sense of security and freedom from money worries. With even just a little bit of money in the bank you will begin to know what it feels like to be rich.

Be careful, it’s contagious, you’ll want to feel more of it. You might even get to enjoy putting money aside!

Part Two

Let’s Talk about Debt

Now I want to talk about debt for a moment. It’s a huge subject and one that I am not going to go into in much depth in this part of Finance for Women. However, debt is so prevalent in our culture that I know a significant number of people doing this course will have a debt problem.

Mind you, the debt is rarely the real problem. It’s the repayment of the debt that is the problem!

Some of you will have come this far and will not have been able to find the targeted 10% monthly net profit figure because of what it costs you to service your debt.

If this is you, I strongly encourage you to take a look at another course on this site – Drop the Debt.

Some of you will have come this far, calculated your income and expenditure, revised it according to the 4 way exercise, done what you can to increase your income, found your 10% AND have debt. Equally for you. If you have any debt at all, you could eliminate your debt in double quick time and use the extra cash to put you on the fast track to the next stage of financial freedom.

It is virtually impossible to build wealth and service debt at the same time. So begin here now. Make a commitment to yourself that you will not add to your debt from today forward and at least do exercise number 2 to begin to deal with your current debt

WARNING

I want to stress that the action item regarding debt is a very basic process designed for limited debt.

If you have any significant level of debt or a level of debt that is causing you any worry I strongly recommend that you talk to someone directly. There are many, many things you can do to quickly and easily eliminate even substantial debt and still enjoy life while you are doing it. To find the best plan to eliminate worrying debt requires more guidance and detail to make informed choices than space allows for here.

Action!

Actions of the Week

1. Emergency Fund

Take a fresh page in your notebook and write Emergency Fund across the top. Calculate how much you want to put aside and a date by which you will achieve this.

To do this, you must ask yourself if you were to be out of work tomorrow and had to survive until you found a new source of income, how long would you like to give yourself to do that. A rule of thumb is 2-24 months depending on your own comfort level. Now multiply the number of months by your Must Have total from lesson 3. Put two big fat red lines under this figure. This is your first goal to achieve using your 10%. Divide the total by the amount that is your 10% and you will find out how many months it is going to take you to fill your emergency fund. Mark this date in your calendar

2. Drop the Debt

List each debt you have showing the total you owe, the amount you pay per month and the number of payments left to pay. Pick one of them that you would really like to have paid off. Call it debt number 1. Do not pick your mortgage, leave that one to last. What date is the last payment of the debt you have chosen?

Go back to your net monthly figure. I want you to find from your current income £75 – £100 per month that you will pay extra towards that debt every month until it is paid off.

Look at what happens if you add the extra money to your monthly payment for that debt.
How many of those increased payments will you have to make to that debt. Note the difference in the date?

When you have paid that debt off, you can put the £75 – £100 PLUS the monthly minimum you were paying to debt number 1 towards the next debt you want to pay off and so on until you are debt free.

3 Go Sparkle

If, as I suspect, you have been somewhat dulled of late by financial concerns or if just doing this course has taken up your free time and your energy for a while, you deserve a bright shiny treat.

Go for a glass of champagne at an uptown bistro, or something that makes you totally shimmer inside. Do it in broad daylight, and dress up for it, high heels, full make-up, hair coifed, the works. Invite a friend. Think Sex and the City breakfast. Think Thelma and Louise with diamonds. Talk clothes, sex, shopping and nothing more serious than broken nails.

4 Financial Education

Schedule financial time for yourself. Take out your personal diary and mark an hour per week during which you will continue to plan your finances, review your progress and add to your financial education. One client takes an hour every Monday morning and blocks the time in her diary under “Freedom.” For a subject that drives our lives like no other, an hour a week is such a small commitment for such huge rewards.

Well, that’s it. You are all done. Or are you only beginning?

Finance is being hailed as the new arena of female personal development. I am not surprised. It has long been overlooked. But now there is a “wealth” of resources out there if you want to continue your education in this subject in a way that is fun and gets results. This course has dipped your toe in the water, there’s much more wonderful information waiting for you to help you on your way at your own pace.

Enjoy your financial journey!

I really hope that you have gained value from this course. If you would like to give me some feedback or to contact us to discuss financial coaching, we would love to hear from you.

Whatever your financial situation from the most simple to the most complex, we have a programme to suit your needs. You can email me on grainne.omalley@insidecoaching.co.uk or logon to http://www.insideocaching.co.uk or telephone us on 028 686 41882.