I don’t know about you but the end of the year brings two thoughts…well, three thoughts for me. One, CHRISTMAS!!!!! Two, fresh start on January 1st! And three, holy cow, what’s my money situation? Taxes are coming.
A big, big thank you to Kristen Robinson, SVP of Women and Young Investors at Fidelity Investments for taking the time to develop these year-end money tips for working moms and female entrepreneurs!
2 Tips for Female Business Owners / Entrepreneurs:
Keep Your Future in Mind with the Right Retirement Account for Your Needs
- Look into the different plans available to business owners, such as a 401(k) for Small Business, a self-employed 401(k), SEP IRA or SIMPLE IRA. You may need to appoint a plan administrator- someone who takes care of administrative responsibilities and ensures the plan is operating according to the Plan Document. Learn more about these different types of accounts here.
- Contribute to your account. The deadline for depositing employer profit-sharing contributions for the current calendar year is generally the business’ tax-filing deadline, plus extensions (for unincorporated businesses, this date is usually April 15 of the following year, plus any extensions).
- If you own a business, have you considered how best to plan for the future? If you plan to keep it in the family, consider creating a structure that makes it easier to transfer the business’s assets to other family members, such as a family limited partnership or a family limited liability company.
- There are many options; your attorney or tax adviser can help you select one that is appropriate for you in light of your specific situation.
4 Tips for Single Moms:
Get Involved in Your Family’s Finances
- It’s important to have a full picture of the family financial situation. At minimum, know what accounts you have and with whom. That includes banks and investing accounts, life insurance, mortgages, and loans. Having a handle on this information is an important foundation as you plan for the future, and can bring greater peace of mind.
(EDITOR’S NOTE: Yes! Yes! Yes! I am still getting a grip on my finances after the divorce. I realize now how little I knew before and how problematic that can be.)
Save for Retirement
- Retirement is not a destination but a journey, and it’s never too early – or too late – to start putting away savings for the future. Along the way, there are myriad opportunities to get off the path—and back on it. And at virtually any turn in the road, there are possibilities to speed up your progress.
- Make it a goal to save 15% or more of your income each year. If that’s not reachable today, make sure to make it a priority to carve out what you can. Even smaller amounts will add up over time.
- Aim to have no more than 50% of your take-home pay go toward your “must-have” expenses.
Try to Save Three to Six Months of Essential Expenses in an Emergency Fund.
Look for Growth Potential from your Investments
- Knowing your financial personality can help you determine the right mix of stocks, bonds and short-term investments that match how comfortable you are with risk, and have the growth potential to meet your life’s needs, be that when you want to retire or when you want to send kids to college.
- If you’re not sure where to start, read up online, or reach out to a professional. There’s never a fee to come into Fidelity to talk to a financial planner, but we do recommend you reevaluate twice a year. Just like you take care of your physical health by visiting the doctor and dentist, think of this as taking care of your financial health, which is vitally important as well.
Protect your Legacy
- In order to ensure that what you’ve accumulated is distributed to your children, family and causes you care about most, it is important to name beneficiaries and create a will and health care proxy. Yes, it can be uncomfortable to think about the ‘what it’s,’ but it’s important to be prepared for the unknown. Do you really want someone else making these decisions for you?