Women & Money: Tips for Financial Empowerment

Ways to combat salary disparities

harrine_freeman1Savvy money management skills are a necessity to weather these tough economic times. BlackEnterprise.com has got you covered with our supplement to the magazine’s three-part “Women & Money” series.

Over the next two weeks, we’ll have money management tips and strategies from Harrine Freeman, CEO and owner of H.E. Freeman Enterprises, a credit counseling service.

BlackEnterprise.com: How can women begin to maximize their salary and financial earning potential to pay off debts?

Harrine Freeman: On average, men were paid more than women for the same or similar jobs. For every dollar a man earns, women get paid 77 cents. To help change the pay discrimination, women can write Congress to ask them to support the Lilly Ledbetter Fair Pay Act to provide equal pay for women.

Further your education and income potential by obtaining at least a bachelor’s degree. If you can afford it and have the time, get a graduate degree or a few certifications related to your specific job industry. Women with a bachelor’s degree earn $1 million over their lifetime, and those with a master’s degree earn $2.5 million over their lifetime. Women with a doctorate or other professional degree (law, medicine, etc.) earn $4.4 million over their lifetime.

Here are five steps to help maximize your salary:

–Consider changing departments or employers to increase your salary.

–Ask for raises, volunteer for high priority projects, develop a career plan with your supervisor, and discuss the contributions you wish to make to help your company grow.

–Temporarily reduce or stop 401(k) deductions to gain extra money to pay down debt.

–Reduce tax withholding for three to six months, and use the extra money to pay down debt.  (Remember to switch your tax withholding back to your original deductions to prevent owing taxes at the end of the year.)

–Pick a career that has growth potential.

Previously in the series: Women & Money: Adequate Budget Management

ACROSS THE WEB
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  • http://www.showcasemagdir.com Denise Bethune

    Temporarily reduce or stop 401K deductions was a interesting concept, and reduce tax withholding for three to six months.

  • http://www.showcasemagdir.com Denise Bethune

    Question? What if you work for an organization that won’t allow for this temporary stop to 401K. I work for an organization that won’t even let you borrow from the 401k. But they do offer a 403b plan to the employees.

  • http://www.hefreemanenterprises.com Harrine Freeman

    Hi Denise, thanks for your feedback. Verify what you were told by looking at the original paperwork you filed out when you signed up for your company’s 401K. If you cannot find the original paperwork contact your Human Resources department and ask for a copy.

    If you are unable to temporarily stop making deductions to your 401K ask if you can reduce deductions payments, i.e. if you contribute $50 a paycheck reduce it to $25 a paycheck.

    Temporarily stopping 401K deductions or reducing contributions should only be used as a last resort after you have created a budget, reduced expenses and have stopped charging.

  • April McNeel

    I have a 403B (I work for a school so there’s no monthly match) worth just under $40,000. It earns very little quarterly interest, and I took out a $12,000 loan against it years ago which I currently repay through automatic deducations monthly. I have been seriously considering surrendering the annuity to eliminate ALL DEBT that I currently have ($38,000 would make me DEBT FREE), and starting over by building a retirement fund that accrues more interest. I was figuring, with no debt, I could take the money that I was using to pay minimums on credit card bills (highest interest rate is a whopping 24%)and place it in a ROTH IRA or another 403B at the annual maximum, and save to buy a house next year. Most people say this is a bad idea, but the idea of eliminating all debt and building my wealth starting immediately sounds tempting. What are your thoughts?