Women and Their Finances 101

by golda on March 29, 2012

The First Thing Women Should Do To Protect Their Finances

By Pamela Otten


Studies show that a woman’s biggest fear is running out of money and ending up a bag lady on the street.  Women think differently about money than men do.  For women, money represents security, and women will feel fear and even terror when there is not enough money.

When there is not enough money before the next payday, a woman feels very vulnerable, and the lioness comes out to protect her family at all costs.  But how do you protect your family?

Life Happens

Sometimes life gets in the way, and events happen beyond our control.  It could be a child that needs stitches, which results in a large medical bill.  Or your car breaks down, and it costs more than you have in the bank to fix it.  You need the car to get to work. What do you do?

Unexpected events can be devastating to our finances.  It also seems that when one thing happens, lots of other bad stuff follows.  We start to feel that we will never get ahead.

What Society Thinks is Normal

In our society today, the response is usually to pull out the plastic.  Most of us have multiple credit cards.  We play the credit card game of switching between cards for emergencies, depending on which card happens to have some available credit.

Unfortunately, pulling out the credit card for emergencies is all too common, and what we consider “normal.”  After all, everyone does it, don’t they?  Why should we expect to be any different?

A Better Way – the Emergency Fund

There is a better way.  And it’s so simple you won’t believe you haven’t done it before.  Your grandparents certainly did it, even if your parents didn’t.  It’s called an Emergency Fund, or as your grandparents would have called it, “saving for a rainy day.”

The concept of saving is something our society has lost.  For years, the USA had a negative savings rate – in other words, we were spending more than we made, and we were not saving any money at all.  This has changed in the last few years, and the USA now has a positive savings rate again.

After the recent recession, people started to see the value of savings again.  This was only after many people lost their jobs, and then their homes, because they had no backup plan of savings to protect them.

If you want to protect your family, you have to protect your finances.  And the first thing you should do to protect your finances is start an Emergency Fund.

It’s Not Complicated

Starting an emergency fund is not a complicated thing.  It doesn’t require some type of complex investment.  A savings or money market account in a bank is fine. You don’t want to keep your emergency fund in a jar or drawer in your house, because it would be way too easy to dip into it for non-emergencies, like “I need a pizza delivered right now.” You do want it easily available to you when an emergency happens.

What is a good amount for an Emergency Fund?  $1000 is a good goal to start with.  If you have an income under $10,000/year, start with $500.  Many of us have never had that much money in a savings account in our lives.

Now I know what some of you are thinking – “It might as well be a million dollars.  I’ll never be able to do this.” Stop that negative thinking right in its tracks.  This is about protecting your family.  Remember you would do anything to protect your children!

How to Get Started

You start saving for your Emergency Fund by paying yourself first.  Not last, or only if there is any money left after paying the bills.  Make your first payment a commitment to your Emergency Fund, after you have paid your tithe to your church.

Beyond paying yourself first, here’s some practical ideas on how to add to your Emergency Fund.  Sell some stuff.  Everyone of us has stuff we don’t use anymore.  It’s a great time of year to have a clear out garage sale, or get familiar with Craigslist or Ebay.  Be honest with yourself, and admit you will never use that stuff you bought on the late night infomercial.

If your finances are already tight, you may need to take on some extra temporary part-time work to build your Emergency Fund.  Or start a part-time business on the side, while keeping your current work.  This may sound difficult, but remember it’s only temporary.

Your Goal

Your goal is to ultimately have 3-6 months of expenses in your Emergency Fund.  You may need more if your income is unstable or not regular.  The initial $1000 is enough to cover most unexpected medical bills, or the random car repair.  After you get the $1000 done, make it your goal to add to your fund regularly.

The peace of mind you will have will be priceless.  No more worrying about how you will pay for the unexpected events in your life.  No more pulling out the plastic, and going even deeper into debt. Make a commitment to start today on building your Emergency Fund to protect your finances.  For more information on how to become a Super Saver, please click the link to check out my article on this subject.


Pamela Otten is CEO of Pamela Otten LLC, a Registered Investment Advisor. She loves to work with women business owners and entrepreneurs, and women in transition due to job change, death, or divorce. Pamela will help you set and reach your financial goals, educate you to understand your investments, and teach you how to do more charitable giving. Pamela is a Qualified Kingdom Advisor (www.kingdomadvisors.org), trained and committed to integrating biblical principles with her investment advice. Check out Pamela’s blog at FinancialMom.com, another free resource for financial advice.

Financial Planning, Investment Advice, and Investment Management provided through Pamela Otten LLC, Registered Investment Advisor. The opinions voiced in this material are for general information only, and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, please consult your financial advisor prior to investing.



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