Everything You Wanted to Know About Your Finances

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 doesn’t mean they still can’t put their retirement on autopilot. And that doesn’t mean that they can’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 one’s financial picture, the emergency fund, which was our grandmother’s rainy day fund. Call it whatever you want, but it’s cash; three to six months worth of living expenses, covered in liquid investments as you’re investing alongside your retirement. Your retirement account is not your cash cow. It’s not your emergency fund.

BE: What about those women who say “I can’t save or invest because I don’t earn enough money” or “I have to worry about taking care of my kids or aging relatives?”

St. Claire: Putting yourself first means just that, putting “you” first. So, the $5 coffee, you might have to forgo that. Do coffee at home, $5 to $7 is a savings. Make your child’s lunch instead of giving them $5 to $7 for lunch money. What’s going on in the market is a wake-up call for everybody. A dollar is critical. Respecting money is really what it’s all about. A dollar is not a throwaway because it adds up to $50, to $100. I think that’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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