Making money as simple and easy to understand as possible — that’s always been our goal at HerMoney. That’s why we’re advocates of writing up to-do lists and having goals for paying off debt, saving for retirement, and investing — so you know exactly what to do with your money and why. (The need for a convenient money road map is also why our founder and CEO Jean Chatzky wrote “Money Rules” and “How to Money,” both of which have dozens of straightforward guidelines to help you build a solid financial foundation!)
But we also know that the best money rules can often look different for women. For example, the general rule for emergency funds is to have three to six months’ worth of expenses saved, but women are more likely than men to take time off of work for their families. We’re also more likely to be furloughed or laid off, and the recent tech layoffs showed us that women are 65% more likely to lose their jobs. With all this in mind, women are now being recommended to have bigger emergency funds than men, with close to 12 months of cash reserves on hand. And we all have our own money rules that we need to make, to ensure we can hit all our personal goals. One of the best people to guide us in making our list is Ramit Sethi, host of the new Netflix show, “How to Get Rich,” where he works with people across the country to help them achieve their richest lives. Ramit is also a personal finance expert and the author of the New York Times best-selling book, “I Will Teach You To Be Rich.”
But what is “rich,” exactly? It’s not private jets, mansions, and courtside basketball seats. “A rich life can be traveling for a month or two every year, a rich life can be buying a beautiful cashmere coat, or a rich life can be picking up your children from school every afternoon,” Ramit says “So your rich life is yours, and you define what it is.”
Ramit defines his own “rich life” using a set of 10 money rules. (He recommends getting really specific on these for yourself – because every person’s list will look different!) Ramit says one of his personal money rules is to save 10% and invest 20%. “If I’m doing these things, then I can buy all the dinners out I want to buy,” he says. And if that’s not for you, that’s fine — the beauty of money rules is that they’re flexible! (So if your own money rule is to save 5% and invest 5%, that’s great, too! You can adjust and save more over time. The important thing is that you keep plugging away at your goals and don’t get discouraged.)
Lastly, in Mailbag, we discuss the best plan for easily investing in a Roth IRA, and whether to put money in a CD or a high-yield savings account. In our money tip of the week, we dive into the monthly money conversations you should have with your partner — over pasta or a nice glass of wine, of course!
READ MORE ON HERMONEY:
- The Top 5 Money Regrets People Have Before They Die — And How To Avoid Them
- Why You Overspend: 5 Common Shopping Mistakes
- HerMoney Podcast: Is Work-Life Balance Possible? Get Rid of The Guilt, For Good
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