BE: A lot of women, particularly black women, are now starting to own businesses. So, they may not be eligible for a 401(k). But that doesnâ€™t mean they still canâ€™t put their retirement on autopilot. And that doesnâ€™t mean that they canâ€™t contribute even more in an IRA. Not just a Roth or a traditional IRA but another type of IRA or a solo 401(k) where you can put tens of thousands of dollars in [it].
St. Claire: Even when they do invest, not everyone understands what a 401(k) is for in the sense that they also look at it not just for retirement but as a place to take their money out of for emergencies. This brings into bear the other elements of oneâ€™s financial picture, the emergency fund, which was our grandmotherâ€™s rainy day fund. Call it whatever you want, but itâ€™s cash; three to six months worth of living expenses, covered in liquid investments as youâ€™re investing alongside your retirement. Your retirement account is not your cash cow. Itâ€™s not your emergency fund.
BE: What about those women who say â€śI canâ€™t save or invest because I donâ€™t earn enough moneyâ€ť or â€śI have to worry about taking care of my kids or aging relatives?â€ť
St. Claire: Putting yourself first means just that, putting â€śyouâ€ť first. So, the $5 coffee, you might have to forgo that. Do coffee at home, $5 to $7 is a savings. Make your childâ€™s lunch instead of giving them $5 to $7 for lunch money. Whatâ€™s going on in the market is a wake-up call for everybody. A dollar is critical. Respecting money is really what itâ€™s all about. A dollar is not a throwaway because it adds up to $50, to $100. I think thatâ€™s the most critical thing to adjusting your lifestyle. So, in fact you can figure out where to start saving. You start with the $50 and you auto invest the $50 a month.
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