Advice for women struggling to get by
Women are bearing a tremendous financial burden during the pandemic, primarily because they’re leaving the workforce, by choice or by force.
The Associated Press spoke with Suze Orman, personal finance expert and host of the podcast Women & Money, about how women can survive and emerge from this period.
A lot of financial advice is focused on savings and investing. But what advice do you have for people who are simply struggling to get by?
You first have to list everything you spend money on and determine the mustspends. Buying clothes or ordering something on Amazon, those are not a must-spend. Gasoline for a car, food at a grocery store, those are must-spends. List them in terms of priority — shelter and sustenance are the top.
Then, look at the must-spends and see what you can suspend. Federal student loan payments are suspended until the end of September. Mortgages you can suspend. If you are struggling, do not pay bills you do not have to pay if you can put them on hold.
It’s important to take a really realistic look at your life, so that you don’t keep kicking the can down the road. If you are going to owe your landlord eight months of back rent and you can’t pay it, you have to start making a plan now for the day that happens.
Even just a one-year employment gap can lead to a big decrease in earnings for women. For those that do return to the workforce, what can they do to make up for this period?
It’s not just women, it is how are people going to make up for this lost year.
You have to look at this as an opportunity. The opportunity is that you learned you need an emergency saving or savings account. Or that you keep your car for 10 or so years instead of getting a new one every few years.
You make up for it by spending less than you normally would spend. You also make up for it by being active with your money. You make up for it by understanding that you pay for taxes now and opt for Roth retirement accounts. You make up for it by not buying certain investments. And by making sure if you own a home making sure it’s paid off by the time you retire.
That is what we have to learn. This loss could lead up to the biggest gains of your life.
The pandemic is expected to set women back years in terms of economic security and representation in the workforce. Do you think that they, as a group, can recover from this?
Absolutely. I absolutely do. I do think it could be another rough year. I think women have the ability to recreate themselves all the time.
If you have what it takes to recover from a divorce — and most women do — or the death of a spouse, you can recover from a one or two year setback from a pandemic where the entire world was affected.