Why Women Should Save Money Differently Than Men


We all know that ‘women are from venus and men are from mars.’  In her new book, One Bucket at a Time: A Woman’s Guide to Creating Wealth, author and financial advisor Terrell Dinkins makes the case that the same rule should apply to our finances.

[Related: Female Breadwinners Leading Households and Families More Than Ever]

“Because of divorce, widowhood or remaining single, many of us will have to carry the financial load alone,” says Dinkins. “Add to that the blessing and curse of living longer than men, and the fact that many of us are taking care of parents and children, and you see how women have to be strategic when it comes to saving and growing money,” she adds.

Black women face even bigger financial challenges, making 64 cents for every dollar white men make, and being more likely than other groups to raise children on their own.

Dinkins advocates saving money in “3 different buckets:”

Short-term bucket: This is where you keep your liquid cash for emergencies. Because women tend to be single and heads of households, they should actually have 6 to 9 months of living expenses in this bucket. This is where you should save for things you have to pay for if you lose your job.

Mid-term bucket: This is where you put money you’re willing to take risks with, like investments in stocks and mutual funds. We make less than men, so this is really important.  No one should ever take more risk, however, than they are comfortable with, which is why you should always consult with a financial professional. You also want to make sure you fill the short-term bucket before you worry too much about this mid-term fund.

Long-term bucket: These include employer-sponsored retirement plans like 401 (k)’s, IRA’s, and SEP’s. Never walk away from free money in the employer sponsored funds, and take advantage of company matches. You also want to start filling long-term buckets early because the markets will go up and down; but remember, you’re in it for the long haul.

As far as how to save money: “Pay yourself first,” says Dinkins. “You may have to do things like get a roommate or prolong retirement, even move to a place with a lower cost of living; but you want to keep your eye on your goals and your most important asset —- You.”


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