Single & Free

Lay the foundation for your financial future while you are relatively free of obligations

Like many young women, Chiri Holt enjoyed living the single life. With a law degree in hand and no children to care for, she spent her income on dining and shopping, leaving little else for savings. But the 28 year old quickly learned that flying solo also has its own set of long-term financial circumstances to consider.

In 2001, Holt was working in Houston as a legal assistant for an estate planning attorney, many of whose clients were preparing for retirement. They had large retirement funds, built up over time through diligent saving and investing. In fact, one individual, she recalls, had grossed approximately $1 million in savings. That’s when her eyes began to open. Seeing that “helped me understand that how they spent and saved made a big difference in the long run because they understood money and what to do with it,” Holt says. “I want to have the best care when I retire, but I realized I hadn’t been saving my money.” That was the turning point for Holt, who had the destructive behavior of spending money as fast as she earned it.

As an undergraduate, she amassed $1,000 in credit card debt. In law school, she spent $100 out of her $300 weekly pay as a sales associate to buy clothes. “I was never told about money or saving, that’s why it didn’t come naturally,” she says. “I would spend my money knowing I would get more, and as long as I didn’t ask my mother for money, she didn’t tell me about saving,” she says.

Soon after law school, she headed back to her hometown of Detroit and went into private practice. She was determined to get her finances straight, but dining at restaurants and shopping quickly consumed her income again. “Once I got a taste of making more money, it got out of control,” she says. “I knew I needed help. Time just kept passing away and I had to wonder, ‘What have I done with my money?’”

In May, Holt met with Jimmy C.B. Taylor, a CPA with AXA Advisors in nearby Southfield, Michigan. For the past five months, she has concentrated on building a retirement plan, paying off $50,000 in student loans, and conquering her lifetime challenge–saving.

PAY YOURSELF FIRST
Taylor, who has a number of female clients between ages 25 and 32, says people are so concerned with paying their bills that they forget to put money away for themselves. “When clients bring in their budgets, there are no line items for savings,” Taylor says. “You need to treat yourself like a bill.” He recommends that women aim to save 15% — 20% of their monthly income.

OPEN A RETIREMENT ACCOUNT
Experts also recommend contributing to a 401(k) or a 403(b) account for women who work for nonprofits, such as schools and hospitals. Taylor suggests that since Holt is self-employed, she contribute to a simplified employee pension (SEP-IRA). According to Vanessa Summers, author of Get in the Game!: The Girl’s Guide to Money and Investing (Bloomberg Press; $15.95), since

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