The new year has come and gone and things have settled down for most of us. Many people (myself included) begin the new year full of energy and ready to go. We are full of ideas and things we want to accomplish in the new year. Then somewhere around week two of the new year, things slowly start to fizzle out. By the end of January, the resolutions and goals are forgotten about and it’s back to the same old routine of life. We might have wanted to save more money or lose those last 10 pounds this year, but settling back into what we are comfortable is just too easy.
As women, what if we could take one area of our finances and make a difference this year? I want to focus on investing because I think this is the one area that women fail to take action. Sometimes it’s out of fear, sometimes it’s out of lack of knowledge but whatever the reason, more women need to get started investing and they need to do it now!
According to the Women’s Institute for a Secure Retirement, elderly women are twice as likely to live in poverty as men and experts do not predict much change in the future because:
- Women earn less money than men and have less to save;
- Caregiving responsibilities make women more likely to leave jobs or work part-time and forfeit pension benefits as a result,
- And women are more likely to work in occupational sectors, such as the service industry, where pension benefits are less common.
If you’ve been putting off saving for retirement, consider this article your wake up call. Here are four reasons why investing is important as you plan the New Year:
Reason 4. Build – We all know saving for the future is important, but for some of us, the future seems so far off we are not that worried about it. Instead of building our nest egg, we worry about what we want now and our spending and savings reflect that. Building your nest egg is an important component of your financial picture. Not only are you building your financial foundation, you will have the peace of mind knowing you can rely on yourself when it’s time to retire.
Reason 3. Benefit – If you have yet to start investing, one thing you are missing out on is compound interest. It’s never too early or too late to get started investing but the earlier you start, the more you will be able to utilize the power of compounding interest. Investopedia defines compound interest as interest that accrues on the initial principal and the accumulated interest of a principal deposit, loan or debt. Compounding of interest allows a principal amount to grow at a faster rate than simple interest, which is calculated as a percentage of only the principal amount. By starting early, you are able to grow your investment account at a faster rate because time is on your side.
Reason 2. Control – Being in control of your money is a much better place to be than constantly living in a state of financial chaos. When you are in control, it can help alleviate financial stress and worries about the “what if” situations that may come up in the future.
The number one reason investing is important for women as they plan the New Year is Empowerment. Empowering yourself and your financial situation is such a huge hurdle that I don’t think many of us women ever get across. We rely on other people to make our financial decisions and along the way we lose a little bit of our own security. When you take action and do something to propel your situation forward, it can be a huge relief. Not only are you taking actionable steps today, you are planning to take care of yourself in the future.
Do you want to become one of the statistics I mentioned earlier in the article and live in poverty or do you want to change your situation? You have the control to make a difference this year so my only question to you is, what are you waiting for?
This post was featured as a part of a series by Betterment.com called Blogging for a Better New Year.