International Women’s Day is March 8

Media Contact: Barbara Fornasiero; EAFocus Communications; barbara@eafocus.com; 248.260.8466

Wyandotte, Mich. —February 19, 2024 — Inflation is easing – slower than expected – but interest rates remain high, and the annual cost of new car ownership – considering vehicle costs, gas and insurance premiums – is now $12,182 a year, up from $10,728 in 2022, as reported in a recent Wall Street Journal article. With Women’s History Month in March and International Women’s Day commemorated on March 8, it’s a good time to revisit the topic of women and money, according to Carma Peters, president and CEO of Michigan Legacy Credit Union. Having overcome some serious financial setbacks when she was younger, Peters offers experience-based wisdom in her tips for women to get and stay on the right financial track.

 Know the unique factors impacting women and money
Women live longer than men and statistically earn less than their male counterparts; plus, they may take time off to raise children or care for aging parents. These factors need to be considered when evaluating job and salary options and short- and long-term savings approaches.  Women need to be consistent and intentional in aiming to increase their savings whenever possible. When income rises due to a pay raise, new job opportunity, or even an inheritance, a portion of that increase or inheritance needs to be saved.

Establish a budget
Establishing a budget and sticking to it is the most important tool a woman can have to achieve financial success. It’s a difficult but important habit to form: track every penny spent against what’s coming in so you can be accountable to yourself and adjust your spending as necessary. This can also help rein in “weakness” purchases – things we may love but don’t actually need – like designer purses.

Don’t count on a second income
More women are marrying later in life, or not marrying at all. A Washington Post article from March 2023 reported that a record 52% of women in the U.S. are unmarried. Women need to become good independent stewards of their money to achieve short- and long-term financial goals.

Pay yourself first
Women are used to putting others first. But when it comes to saving money, women need to pay themselves first to get in the good habit of saving even a little bit of money each pay period. This will help build up a rainy-day fund or achieve longer-term savings goals, such as for a home, advanced education, an entrepreneurial venture and retirement savings. Make a consistent effort to increase savings whenever possible. When you pay off a debt, send at least a portion of the former payment to savings; as your income increases, send some of that raise to your savings or retirement plan.  If you have an employer match on retirement, maximize it by contributing to receive 100% of the match. If you don’t, that is real money you are missing.

Have a 6-month rainy day fund
While three-month’s salary is commonly touted as the ideal rainy day account number, play it safer and aim for a six-month fund to cover unexpected expenses that may arise, such as a job loss or major home repair, the need to purchase a new car, parental leave – or even a unique travel opportunity. Begin by saving a small amount of each paycheck.  If you can’t trust yourself to save, consider sending it via direct payroll deposit or bill pay to a financial institution where you have no ATM/debit card or online banking access.  When you put ‘windfalls’ and planned regular savings together, you will be surprised how quickly the rainy-day fund can grow.

Establish good credit
A key component of a good credit score is not using more than 50% of your available credit limit. That accounts for 35% of your credit score. Equally important, make all credit card and loan payments on time. Combined, these two factors comprise 65% of your credit score. Also, contrary to popular belief, using the trendy buy-now-pay-later option does not help build good credit.

When you need a loan, get the right one
There are a variety of loans for a reason – to meet a wide range of consumer needs. It’s important to pick the right loan so as not to ‘pay’ more money than you need. The goal is finding the right loan at the right rate in keeping with good financial decision-making. But also make sure the loan makes sense. For example, if you need a $20,000 loan for your wedding, are you likely spending more than you can afford for a one- or two-day event?

Also turn to your financial institution first – not payday lenders – for immediate lending needs to find the appropriate loan at the most secure and competitive interest rate. Payday loans charge high interest rates for money that has to be repaid quickly and can put users on a dangerous financial path that can be difficult – and scary – to get off of.

Establish a relationship with your financial institution to optimize good financial decision-making  
The number of women making financial decisions – whether single or married – continues to grow. Women should have a relationship with a bank or credit union that is focused on optimal customer services. That makes it easier to find staff who are trained to understand what savings vehicles may be best – or what loan makes the most sense – for your particular needs. Differing interest rates and term lengths for both savings plans and loans have measurable value to savers and borrowers.

Know the difference between saving and investing
A penny saved is a penny earned, but to maximize savings, include investments as well. When the timing is right, consider seeking the services of an investment advisor (perhaps a woman investment advisor!) to take your savings beyond standard interest rates. Because there are risks of losing the principal and actually having less money than before investing, have an investment advisor guide you to the best investments for your situation and risk tolerance.  Interestingly, a 2021 study found that more women than men use a financial advisor because men are more confident they can invest on their own.

“Many money tips are gender neutral, but women should recognize and have a plan to conquer some of the special financial challenges they face,” Peters concluded.

About Michigan Legacy Credit Union
Michigan Legacy Credit Union (MLCU) is a member-owned, not-for-profit financial cooperative serving members who live, work, worship, attend school, or own a business in the state of Michigan. Michigan Legacy Credit Union is committed to providing quality financial services at a competitive price, delivered professionally and efficiently while keeping member/owners and their needs first. For additional information on MLCU, visit: www.michiganlegacycu.org.

###