We'd like to think that gender stereotypes are a thing of the past, but new data suggests that when it comes to managing money, women are not as independent as you'd expect. "91% of women in couples are not fully engaged in financial decision-making," says author and money expert Stefanie O'Connell. "Yet nine out of 10 women will be solely responsible for their finances at some point in their lives!"
It's not just a trend among older married couples. A Fidelity study found that millennial women in relationships aren't much better—just 11% admit to taking control of their financial future. Where do you stand?
Answer these seven money questions to make 2017 the year you tame your finances. It's not as scary as you think (promise!).
Do You Have a Budget?
It might seem like a no-brainer, but a massive two in three Americans admit they don't have a detailed budget. Operating without a budget is like playing football without a game plan—how will you know where you need to be and what route to get there?
According to Laura Adams, financial expert and author of Smart Moves to Grow Rich, drafting a foolproof budget is as simple as following five steps:
- Calculate your monthly income.
- Tally fixed expenses (rent, a mortgage, utility bills, etc.).
- Estimate variable expenses (gym memberships, restaurants, etc.).
- Assess what's left.
- Review your budget.
If you answered "no": Use our template to draft your first budget.
PEN A BUDGET:
Do You Have a Backup Fund?
The term "backup fund" might seem a bit misleading (it hardly sounds like a financial priority) but it's one of the most important steps you can take to manage your money like an adult. If you live paycheck-to-paycheck, you're not alone: A new Bankrate survey reveals most Americans can't handle a $500 unexpected medical bill.
If you answered "no": Set up an online savings account and aim to contribute $50 of every paycheck until you reach your goal. Yahoo! finance expert Mandi Woodruff says it should contain three to six months' worth of expenses to be safe.
How Much Debt Do You Carry?
Why is debt such a dirty word? We're comfortable sharing so many intricate details of life with our S.O.s, yet the discussion of debt—and how that could impact our future—often falls to the wayside. In short: You can't fix a problem if it's not accurately defined.
If you said "I'm not sure": Have a frank discussion with your S.O. Find out what kind of debt they carry and whether it's a priority to pay it off. Investigate your student loan payment plan, and set your payoff priorities as a pair.
What's Your Retirement Plan?
When you spend your work week trying to reach the top of your career, retirement can seem like a distant reality. While it's easy to relegate it to the list of issues to tackle "one day," the longer you wait, the more damage you're likely doing to your future.
If you answered "What retirement plan?": It's time to tackle your 401(k). Amy Godwin, vice president and senior branch manager at Fidelity Investments, says it's one of the easiest ways to start saving for your future. "If your employer offers a retirement savings account, make sure you're taking advantage of the opportunity," she says. "The money comes directly out of your paycheck automatically, so little by little, you can invest more over time without necessarily having to think about it."
How Many Credit Cards Do You Have?
There's no right or wrong answer to this question, says NerdWallet's Sean McQuay, but it's crucial that you and your S.O. know where you stand. "Too many cards, in my mind, is the number you can't actively manage," he tells MyDomaine.
If you said "nada": A massive 67% of millennials don't have credit cards, which is an issue if you and your S.O. plan on leveraging your credit score to get a loan in the future. If you both have cards but aren't sure how many, sit down to chat about what your rewards are. Are you making the most of every card?
KEEP YOUR CARDS IN ORDER:
What's Your Savings Goal?
Whether you want to splurge on a Paulistano chair or are saving to buy a home or start a family, the first step to achieving your goal is understanding it. O'Connell says visualization is often underestimated. The key is to "experience your goals more visually, emotionally, and experientially, [so that you] become invested in those goals, and stay committed to the behaviors required to achieve them," she says.
If you said, no idea: Even if you're not consciously saving for a specific purchase, everyone encounters life milestones that require money. Think about what the next five years of your life hold (a new apartment, improving your education, switching careers), and make that goal visual. Update your phone wallpaper and leave yourself visual reminders so it's top of mind.
What's Your Household Income?
You probably know your annual salary, but do you know your S.O.'s income? Understanding your combined household income will help you both feel in control of your spending and have a better understanding of your financial situation.
If you said "umm…": Set aside some time to talk about money with your partner. Find a pay stub and together calculate your gross income, plus how much reaches your bank account after tax.
Thinking of taking your relationship to the next level? Ask these six money questions before tying the knot.