“Now what…?”

Simonne on how to make sure your future's a dream ...not a nightmare.

We love hearing about how Sheconomics changes lives. An inspiring review on Amazon recently told how it transformed one business woman's life. She cleared her debts and felt huge excitement about being back in control financially. 

Often clients are in crisis when they call up Simonne at Wise Monkey. She helps them plan their ‘debt free day’ and says it’s positively exhilarating when that day arrives and they suddenly look out at the expansive horizon and new possibilities.

But then, frequently, the next question is where do I go from here?

A little financial planning could help you achieve your big dream.

In answer to this question, Simonne has three suggestions:

Step 1) Build a contingency fund
When money is no longer going into debt repayments it can be all too tempting to rush out and spend it. Start to build an emergency reserve now so you don't plunge back into debt. Enough to live off for three months is ideal, saved somewhere accessible (e.g. in a cash ISA).

Build this fund by arranging a monthly direct debit to go out soon after you get paid.Then the money is automatically saved each month, before you can get your hands on it and spend it.

Step 2) Take a long view
Next look to that horizon and see how your financial future looks.

If you have an employee’s pension scheme review it regularly, especially the contribution rate. Sometimes the employer will match contributions up to a maximum limit. Simonne found that clients who were paying 1% of their salary into a pension pot, and the employer likewise, could get matched funding up to 8%. So by finding that extra 7% (as little as 4.2% after tax for higher rate taxpayers), they could be putting 14% more into their future.

In fact Simonne found one client for whom an extra £60 per month would result in having £238 per month invested (counting in the added contributions from her employer and top-ups from tax/national insurance savings)! Fortunately all companies are being forced to pay into pension schemes for their staff over the next few years through auto-enrolment. So check this out if you’re eligible.

Some people reduce their contributions during an expensive period in life, like buying a house or having a baby, then simply forget to increase them again.

And self-employed people, under the current rules, have to finance more of their future for themselves. Many of the self-employed hope their business will be their pension, but that can be risky. Starting to make small amounts of savings, with the power of compound interest, can make a big difference.

Simonne says it’s all about having a strategy and not necessarily at any extra cost. With some careful strategic planning now you can make a massive difference to your financial future.

Step 3) Mind the gap

Most people's financial strategy is to drift along, put a bit of money aside when they can and hope for the best. But doing some simple maths could take your future planning a step further: 

A = Assess where you’ll be a a future date. Maybe the mortgage will be paid off and the kids might even be off your hands? Work out how much income you'll need per month in today’s terms.
B = Then simply check out what state pension you'll get, and any company pension. And add in any other income, or circumstances, such as a property downgrade for instance.
Calculate A – B and you've got your shortfall

Once you know your shortfall online pension calculators show you what you would need to be saving to generate enough to provide the income you identified at A.

Pensions are boring and the future's a long way off, right? 

If that's how you feel, think of it instead as a gift to your future self. 

‘Know tomorrow comes’ is the 7^th Law of Sheconomics. That needn’t be all doom and gloom. See it as a gift to the woman you’ll be in 10, 20,30 years time. Look after her, make sure she’s ok, and she’ll be immensely grateful to you. The steps you take now could dramatically effect whether her life is a dream .... or a nightmare.

What can be more exciting than knowing the dream life you want in the future ... and planning how to get there?

SIX TIPS FOR TWENTY TEN

This week the media have been dipping into Sheconomics for solid advice - see us on motley fool.co.uk, in Oprah's magazine 'O', in Times on-line and Cosmopolitan to name just a few......

Check out our fail-safe tips for a sheconomical 2010 on handbag.com or read the extract below......

Want to be better with your money? Answer the questions that Karen and Simonne have devised below. If you answer ‘yes' to any of them, take note of the tips and put them on your 2010 to-do list.

1. Are you financially immature?

We think we're grown-up, running a home, holding down a job. And then a money problem comes along and our inner child is unleashed. It's a common problem with women and it can stem from being over-protected when young, or from naively believing things will just work out somehow. The first step to being financially savvy is to be in charge of your money. Make financial independence your goal this year.

Tip: Find out about what you earn and what you owe. Sign up for online banking and monitor your finances regularly. Open bills and statements as soon as they arrive and deal with them.

2. Are you secretly scared of money?

Money is an emotionally loaded topic. Lots of women have fears about money. They can remind us of the doom-laden warnings from our parents. Or can be triggered by the technical language and jargon used by the finance world. Fear stops us taking action, so resolve to be ahead of the game this year.

Tip: Break big goals down into small, manageable steps and take one action now. Own up to the gaps in your knowledge and buddy up with someone who knows. Visit a plain speaking, friendly money website regularly, such as moneymadeclear.fsa.gov.uk. Or talk to a financial coach. If you want to empower yourself - find out how compound interest works (see www.fool.co.uk).

3. Do you have a shopping habit?

Shopping has become the way many women regulate their emotions. Research for sheconomics.com found that women use shopping to cheer themselves up, relieve stress or anesthetise themselves against painful emotions. That heady buzz from spending quickly wears off though, leaving only feelings of shame and guilt. Resolve to get high on life, not high on shopping, this year.

Tip: Know why you shop when you do. Spend only when you need the goods, not the buzz. Find alternatives to shopping that boost mood, like exercise, cooking for friends, dancing or gardening. Deal with your emotions, don't take them shopping.

4. Are you afraid to ask for money?

Women are still paid less than men and are far too reluctant to ask for money. If you undervalue yourself then you will be under-paid. Watch your self-limiting beliefs. Just because you hated maths at school doesn't mean you shouldn't have money. And working your socks off doesn't necessarily mean you'll get rewarded. Payback is more likely if you're upfront and ask for it. Be bolder this year. That includes negotiating for better deals and refusing to pay for bad service.

Tip: Ask for what you're worth and don't be fobbed off. Prepare your case and be proactive. If you've hit an earnings barrier, consider moving. If you're self-employed make sure your rates reflect what you're giving and the time you put in.

5. Are you a ‘live now, pay later' person?

Most women today will out-live the men in their lives. Many will also out-live their own savings. What will you do when you can no longer earn money? The earlier you start putting money away for your dotage, the less it costs you. If you haven't begun, resolve to make a gift to your future self this year.

Tip: If your company has a pension scheme, join it now. Or find out about pension options. Pay yourself first: automatically divert a set amount from your account into a savings or pension scheme every month. Confused by all the options? Just remember, doing nothing is the worst possible option.

6. Are you spending more than you earn?

Being financially savvy isn't about what you earn, it's about what you keep. Salary creep is when our spending rises with our salary, and even overtakes it. Aim to save 10% of your salary consistently. Be ready for those unexpected expenses (the boiler blowing up, car repair, job loss or even pregnancy) otherwise they'll plunge you into debt.

Tip: Track your spending for a month and plug the leaks. Shop around for the best deals on your mortgage, utilities, mobile phone etc. Deal with debt now. Seek help if you're in too deep (see cccs.co.uk for free counselling and assistance). Cut up your credit card until you can afford to pay it off in full every month. Have an emergency cushion equivalent to three months' expenses.

For more tips see sheconomics.com, or read Sheconomics­­ by Professor Karen J Pine and Simonne Gnessen, published by Headline, price £7.99.

Win a copy of Sheconomics - we've got 10 copies to give away! Stay tuned for our Sheconomics money webchat with Karen and Simonne later in January.

Article appeared on handbag.com 31.12.10

Sheconomics tips for a cool yule

I wasn’t surprised to read that seven out of ten people report money as their main stressor, according to a US survey for the American Psychological Association. And the Christmas holiday is one of the most tense and taxing times for nearly half of all women.

How can you buffer yourself against seasonal stress and guarantee yourself a cool yule? Here are our Sheconomics tips:

· Invest in yourself. Put aside time for some self-pampering, long walks, old movies or a riveting novel. Don’t let other demands encroach on that precious me-time.

· Have realistic expectations. Let go of idealised notions about the festive season with you as wonder-woman in flashing reindeer ear-rings. Enlighten others about what to expect, then no-one’s disappointed.

· Focus on what matters. Know what you want from the holiday season, e.g. giving back, togetherness or reflection. Make it your holiday philosophy and don’t lose that focus.

· Stick to the budget. Set a limit on what you’ll spend on gifts and food. Scale back those sneaky extras/last-minute treats or try home-made instead.

· Rope in others. Whether it’s help with planning, shopping or cooking or the need to talk and get psychological support, don’t be afraid to ask others for hep when you’re feeling overwhelmed.

Got friends who are feeling stressed about finances? A copy of Sheconomics could be the perfect gift!

OVERCOMING RELUCTANCE - SOME TIPS

The AXA survey really highlighted how reluctant people are to go for financial advice. One in seven people said they'd rather go to the dentist than to a financial advisor. The tips we devised to make it easier for the most-reluctant are:

· Take the first step

Visualise your goal. Have a clear sense of where you want to be. Break down how you are going to get there into small steps. Then take one small step towards your goal today.

· Make it known

Own up to a fear or problem and share it with someone you trust. Enlist the help of a supportive buddy. Once you’ve put it out into the world there’s more chance of a solution.

· Get outside yourself

If you’re trapped by inertia and indecision, ask yourself ‘What would X do?’ Think of someone who you believe has it right financially - then put it into action.

· The law of opposites

You can trick your brain by behaving in the opposite way to how you feel. So acting as if you are the person you want to be will conquer some of the barriers you’ve been putting up.

· Reframe

Putting a different spin on problems can lead to a fresh approach. If the idea of a pension bores you, for example, reframing it as a gift to your future self could shift your mindset.

Almost two thirds of the people surveyed said they would seek help - if they could find someone they trusted.

Simonne has helped hundreds of people sort out their finances, so if you're one of the reluctant ones she may be able to help you -have a look at Wise Monkey Financial Coaching.

Or go to www.savvywoman.co.uk. This great site, run by top personal finance journalist Sarah Pennells, has a panel of experts on hand to answer your financial questions.