Powering Up Your Financial Life

by Hollis Colquhoun • More.com Member { View Profile }

Ever heard of the saying "Money is power"? Well, if you're aware and in control of your money, and you have a financial plan, that money will be even more powerful now and in the future!

It’s easy to feel disconnected from your money these days. Paychecks automatically get taxed and health insurance is taken out, then the remainder pops up in your bank account. With automatic bill pay, certain basic expenses are deducted from the checking account each month and other basic items like food, clothing, gas, entertainment, and miscellaneous, get paid with a credit or debit card; it is all very convenient. Things just don’t seem to cost as much if you pay with plastic!

When you never see real money and never really pay for anything with cold hard cash it’s tough to keep track of your spending unless you review your finances each month. There are free services like Mint.com that can monitor the expenses for you. You plug in all of your financial accounts and household expense direct debits and the service will break down the bills by category, then by item, so you can track your cash flow month by month and make adjustments to your spending if needed.

Of course money is necessary for living a comfortable life but it’s also crucial for financing the rest of your life - when you’re older and (maybe) gray. In your 30’s, 40’s and early 50’s, you are probably concentrating on family, making or saving money for the household, and facing everyday expenses, some planned and some not. It’s easy to lose sight of your longer-term needs and goals when so much is happening in the present. Nevertheless, it is very important to harness the power of your money as early as possible and channel it towards your future., since the only person who can save for yourself is you.

Studies have found that over 75% of our country’s impoverished are elderly women because they make less money during their careers, focus their monetary power on their families and don’t think about themselves until they reach their 60‘s. A large percentage of women become divorced or widowed by the time retirement age hits, then all of a sudden there’s no financial safety net to fall back on. Women are living longer than men by 5- 10 years so, prepared or not, chances are you’ll be in charge of the finances at some point in your life.

Therefore, a woman’s financial plan should include an automatic monthly deduction for savings and even if you’re in your 50’s with very little retirement savings, it’s not too late to start anIRA (Individual Retirement Account) where your money and  interest can grow tax-deferred. You are allowed to contribute up to $6000 to your IRA for 2010 or the amount of your annual earnings if it’s less than $6000. Plus, if you're a stay-at-home mom and your husband earns income, he can set up a non-wage earning spousal IRA for you up to the allowed amount and at the same time contribute to his own retirement account as long as the contributions aren’t more than the total earnings. It’s up to you to ask for this if he doesn’t volunteer. The spousal IRA is yours from then on.

Make it a point to get up close and personal with your money and devise a financial strategy for the future. Money is power and you can be financially powerful. You owe yourself! 

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