AUTHOR: Vernique Henfield, CPA – Senior Accountant
Vernique Henfield, a Certified Public Accountant and Media Correspondent obtained a Bachelor of Science in Accounting from Barry University with honors. After her journey as a student navigating the halls, her financial career led her to gain experience in Audit and Investment Banking. She is also a member of the Bahamas Institute of Chartered Accountants.
This year and beyond, let us #BreaktheBias surrounding women and financial freedom. As women, we balance our professional and personal lives along with everything that falls in between. To lead financially balanced lives, we should view it as a journey of making conscious, intentional financially wise decisions. Certain factors are beyond our control, such as changes in the economy; however, there are factors that we can control by the decisions we make.
Assess your financial situation
Whether you illustrate it visually, write it down, or use Microsoft Excel – it is important to be aware of your current financial situation. Before creating a strategic financial budget and plan, determine your various forms of income. Consider the deductions that will apply against gross income to arrive at your personal net income. Following this, take into consideration all expenses (including the automated subscriptions like Netflix and Tidal). If you have passive income, offset the passive expenses against it and the same applies for business income and expenses. Every penny count, regardless of if it is towards your side business or your household – take account of it.
Create a financial budget
Your financial budget depends on your financial situation, household arrangements, family dynamics, goals, and lifestyle. It includes elements mentioned above as well as your savings, tithe (if you are religious), investment commitments, debt repayments, and leisure spending. The key to implementing a financial budget is sticking to it. This is where discipline and self-control come into play. Every day, make a conscious and intentional effort to live within your means and apply your spending limits.
Establish a strategic financial plan
A strategic plan goes beyond creating a budget. Which savings method will you implement? How will you invest your funds? What type of debt repayment plan will you apply? You can set a standard amount or apply a percentage of your income to arrive at your monthly savings goal. It all depends on you and your financial goals. Investing in a mutual fund is a great way to put your money to work. Consult a financial advisor to discuss your financial objectives, risk tolerance, and your desired timing of return. Other forms of savings and investment options are money market accounts and certificate of deposits. If you have debt, prioritize payment of the balances incurring the highest interest rate.
Plan for a Crisis and the Future
History has shown us that crises happen, and we should prepare as best as we can. Establishing an emergency fund is important; this is separate from the monthly savings mentioned above. Start small by creating a goal of $500 or $1,000; gradually increase it to cover one month of expenses then three month of expenses and so on. Do what work best for you.
Another important factor to consider is planning for retirement. Educate yourself on the options available to you by enrolling in a group pension plan, personal retirement account, or personal pension plan. Become familiar with defined-contribution plans and defined-benefit plans.
The harsh reality is that some women are the primary caregiver within their households and unfortunately, many women are unemployed. The proposed solutions are to utilize approved government assistance, scholarship opportunities, attend job fairs, and never lose hope. Let us be our sisters’ keeper and donate our time or resources if possible.
The approach to seeking financial independence may look different for each person. Assess your financial situation, create a financial budget and plan, implement relevant strategies, hold yourself accountable, and track your financial performance.
