3 secrets for women to conquer money stress

Fidelity research shows how to live financially stress-free.

FIDELITY VIEWPOINTS – 06/20/2019

Many women who feel financially secure and stress-free say they have put a financial plan in place.

Women who annually save 10%-15% of their income in tax-advantaged savings accounts like traditional 401(k)s and IRAs are generally on track to meet their retirement savings goals.

Having an emergency fund of at least 6 months’ of necessary expenses can help reduce stress and bring peace of mind.

3 strategies to reduce financial stress

What can you do to help improve your financial security and overall wellbeing? The women in our survey who aren’t stressing out over money and health share 3 secrets to success.

1. Build an emergency fund of at least 6 months’ of expenses so you can weather the unexpected

In everyday life, stuff happens. The roof leaks. The car breaks down. The kids need a cash infusion. That’s why it’s critical to have an emergency fund, no matter your life stage, gender, marital status, or income.

Overall, Fidelity research finds that less than half of Americans have an adequate emergency fund. Our stress-free ladies break the mold: 77% have one.

If you don’t, here are 3 simple steps to get started:

• Look for ways to cut down on nice-to-haves like eating out or buying that extra pair of shoes.
• Put savings on autopilot. Set up regular withdrawals from your paycheck to a separate rainy-day fund until you reach your goal.
• Explore a side gig to supplement your income.

Tip: Save a little bit each week or month until you reach that 6-month target and then you’ll feel better about the unexpected.

2. Save at least 10% of your income a year so you are prepared for retirement

Taking care of your future self is as important as making time for yourself today. It can give you peace of mind too. Of the financially-zen in our survey, 29% say they have been saving at least 10% for retirement year after year.

To be confident you’ll have enough money to maintain your lifestyle in retirement, Fidelity recommends aiming to save 15% each year—but that includes any contributions from your employer. If you are fortunate enough to have one who matches your contributions in a 401(k) or 403(b) retirement account, grab it. That is like free money! And invested well, that money can grow over time.

This year you can contribute up to $19,000 to a 401(k) or 403(b)—and save on taxes too. No 401(k) at work? No worries. You can contribute up to $6,000 a year to an IRA (short for individual retirement account). Lastly, if you’re over age 50, you can contribute even more with catch-up contributions.

Tip: If you cannot save 10% or 15% at first, try to save at least enough to receive the full employer match at work.

3. Have a financial plan

Planning for life’s goals—a new house, a vacation, your retirement—is likely on your to-do list. But have you taken the first step?

While 72% of women surveyed say they want to begin a financial plan, only 52% are confident about doing so. Worse yet, 40% of all women say they lose sleep over money matters.

Our financially stress-free women know the power of planning for the life they want and deserve: 95% have some kind of financial plan in place, and 80% have a long-term plan.
— Read on www.fidelity.com/go/womens-investing/women-conquer-money-stress