Women and Money: What You Need to Realize about Financial Security

After a small health scare which, thank God turned out to be nothing, I spent the weekend worrying about how prepared I was financially should I be unable to work.I discovered that I was not as prepared as I thought. I came up with some common sense rules that all women should follow.

Practice healthy selfishness with your money.

Every financial expert will tell you: Taking money from your savings to pay a child's student loan is putting your financial future at risk. Don't do it!

When I co-signed a loan for our child's Ph.D. program (over my husband's strenuous objections, I might add), I did not think that I would have to pay it off. But when our graduate-degreed child was unable to get a job and make payments, SallieMae set me straight on that score. I, as the co-signer, was as responsible for payments as the originator of the loan.

My accountant warned me that my credit rating would suffer. If payments weren't made, the co-signer's paycheck was as likely to be garnished as the signer. I was afraid not to pay the loan. With Sallie Mae charging 12.9 percent interest compounded daily, $3,000.00 in interest had already increased the original amount to be paid back.

Times are hard and your heart isn't, but loaning or giving money to relatives in need is a dangerous risk. You may create hard feelings by saying no, but it is the best thing to do for you.

Have a good to excellent long-term disability plan.

As you get older, insurance companies up the ante on long-term disability payments and many women, in an effort to save some money, make the bad decision to drop the plan or go with something much cheaper. You know the saying "You get what you pay for"? Believe every word. Long-term disability insurance should be there to help make sure you are financially secure and safe from debt. Think of it as a financial safety net.

Know exactly where your money goes.

There are days when, because of hectic schedules and deadlines, neither I nor my husband wants to cook. Hello take-out and eat-out. It wasn't just with food either. The constant use of my debit card was too quick and easy a fix for many things. Use cash for most purchases.

Don't assume debt based on a future paycheck.

Online shopping is easy, quick and hassle-free, but it is a future debt that is waiting to be paid. Whenever I would charge something I always figured I could pay it next month. Sometimes a good chunk of my check went to pay that assumed future debt. Think before you click.

Respect money and have a solid plan for any contingencies .

You never know what can happen and you need to have some money set aside for emergency repairs. Begin a small household account for any home repairs or upgrades. Add some money to it every pay period. Never touch savings, IRAs, or retirement money unless there is a dire emergency and absolutely no other resource. Let me be blunt: this is your money, your life, and your future.

I am more conscious about my money and am making important changes to my financial future. from this, and I have found what I feel is one dictum for a happy life:

You can never be too careful with your health or your finances. Keeping them both in good shape creates security.

© 2012 Copyright Kristen Houghton