Five Things a Girl Can’t Live Without

Okay, I use the word “girl” loosely.  I mean anyone of the female gender between 21 and 65.  Or older …

And I’m not talking mascara.  Or Tampax®.  Or Spanx®.  Or a Cinnamon Dolce Latte.

I’m talking about the real foundations of life.  Not the things that make your daytime sweet.  Instead, the financial ones that let you sleep soundly at night.  I’m talking about the five pillars of a solid financial future.  And it’s never too early—or too late—to start.

I can already hear some of you screaming.  “How am I supposed to do that when I’m up to my ears in debt?”  “I’m trying to keep my house out of foreclosure and you want me to do WHAT???”

But I’m ignoring you.  You need these things, no matter what your circumstances.  No matter what your age.  No matter what your philosophy of life.

Pillar #1:  A detailed budget.  I know, it sounds deadly.  And most people avoid preparing one like the plague.  Maybe if you call it a “spending plan?”  Whatever it takes to draw up a budget, or plan, nothing gives you a greater feeling of control than having the inflow and outflow of your money organized and monitored.

And nothing makes it more possible for you to spot the “bleeders,” the little expenses that add up and that you’re not even aware of.  First control the bleeders.  Then take an ax, and later a scalpel, to your spending.  Do whatever you can to get your monthly spending lower than your monthly income.

The result will be the end of the devastating head chatter that has kept you up nights … and unfocused days … for as far back as you can remember.

Pillar #2:  A ‘get-out-of-debt’ plan.  There’s debt and there’s debt.  “Good debt” is when you use other people’s money to make an investment in something with a positive return on investment (ROI).  That could be in your education or some asset (such as a house … although that’s no longer the guaranteed deal it was).

“Bad debt” is when it’s used to finance “consumables,” including cars, vacations, clothes, meals, etc. … that will be worth less (or be gone) tomorrow.  (And good vacation memories don’t count!)

To strengthen this foundational pillar, the first thing to do is to “ice” your credit cards by taking them out of circulation.   Or you could get the kind you have to pay off each month.  That will leave you the flexibility you need for business travel, justifiable expenditures, and so forth.

Just remember that when you retire a credit card, that means taking it out of your wallet and putting it in a drawer.  Don’t cancel it or your credit score will be affected negatively.

Next, analyze the debt that’s outstanding and prioritize which card you want to pay off first, while making minimum payments on the rest.  Two schools of thought exist:  (1) pay off the ones with the highest interest rate first, and work down; or (2) simplify your finances by paying off the little ones so you have fewer and fewer statements coming in the mail each month.  Psychologically, the second one is strongest although it doesn’t make as much financial sense.

Choose one, whichever you prefer, and follow that strategy as you fight to get yourself out of the clutches of “bad debt.”  To be able to say—with pride—that you’re debt-free will totally change how you look at yourself and your future.  I can’t explain exactly how that works but, trust me, it’s magical.

Pillar #3:  A retirement account.  It’s important to know you are taking care of yourself for the long haul, and that you do not intend to condemn yourself to surviving on Social Security alone in your later years.  Remember that anything you set aside to complement your Social Security payments will distance you from that survival existence.  Start small, if need be, but start.

Whatever you can put aside, even if it’s just the minimum allowed by the institution holding it, do it!  And if you can contribute the annual maximum, hurray!  Just being able to talk about having an IRA or a 401(k) will give your self esteem a boost!

Whether you’re an employee or self-employed, there are defined contribution plans where you set aside some earnings, before taxes are paid, and avoid having to pay the taxes until you withdraw the money.  By then, your tax bracket is likely to be much lower.  Or you might prefer to contribute after-tax dollars, in a Roth IRA.  I’ll leave the alphabet soup of 401(k) or SEP (Simplified Employee Pension Plan) or IRA (Individual Retirement Account), etc., to your accountant or human resources professional to explain.

Now, if in this volatile market you don’t trust putting your money in traditional market vehicles, like funds, know that you can buy gold to hold in an IRA.  (That’s important if you’re one of the people who think the sky’s about to fall in.)

The key to these accounts is compounding interest.  It is so powerful, regardless of how much time you have left to let it work.  Of course, the more time, the better.  But every contribution counts.  And if your company matches funds, it’s a no-brainer, because that’s free money they’re contributing to your retirement.  It gets set aside, and just grows, as long as you don’t tap into it.

Your retirement accounts are not emergency funds.  They are sacrosanct.  Just think of taking money out of retirement accounts like taking food out of an old lady’s mouth.  Because that’s what it is.  And that old lady is you.

[In 2001, as my world was coming down around my ears, I emptied out my IRAs.  Yet all that did was prolong the inevitable.  Oh, what I’d do to have that money today, compounded over ten more years.  Today I understand that what I did was borderline criminal!]

Pillar #4:  An emergency fund.  You need money that is readily available so you’re not caught off guard by one of life’s inescapable surprises.  A blown car engine.  A broken arm.  A dying friend or relative.  A lost job., a personal finance site, says you need 9 times your monthly “nut” because of the slow economy, particularly if the emergency is that you lost your job.  Suze Orman says 6+ months.  I say it should be however much you can save.  But just knowing it’s there will help you sleep more soundly at night.

Start with whatever you can.  Ten dollars a week.  Fifty dollars a month.  Consider online savings accounts, where fees are lowest and interest rates are more generous than offline … although they’re still pretty anemic.

Putting money aside, regardless of the amount, somehow leads you to save more.  There is an element of taking care of yourself, or of those you love.  It’s powerful.  It’s magnetic.  You might even find yourself revisiting your budget (oops, spending plan) to see where you can squeeze out a little more to set aside.  If feels that good!

Pillar #5:  A vision.  If you don’t know where you’re going, you have no motivation to do what’s necessary to get there.  But if you’ll invest the time and energy in figuring out what’s important to you, what piques your fancy, what you’re passionate about … and write it down … you’ll be amazed how much easier it is to make little sacrifices elsewhere that start you working on the other four pillars.

In summary, I know how much financial distress people are facing.  I also know how people protect some spending habits they think they can’t live without.  But those are just habits.

Yet when you free up that money and put it in one of the first four pillars—and create the vision of what makes life worthwhile—you’ll witness a multiplier effect of every dollar you save.

Give it a try for a few months, and let me know if I’m wrong.  I don’t believe I am.


Would you like to use this article on your blog, ezine, or newsletter? You have my permission to share it in its entirety with the following blurb:
Sharon O’Day is a money expert with a successful career in global finance and marketing, plus an MBA from the Wharton School. Today she specializes in helping entrepreneurial women over 50 remove the obstacles to making and saving money, and to becoming financially free. For more information on how to be “Over Fifty and Financially Free,” visit


Bio: Sharon O’Day lost everything at age 53: her home, her business, everything. But how could that be? She’s an expert in global finance and marketing with an MBA from the Wharton School. She has worked with governments, corporations, and individuals … yes, she was the secret ‘weapon,’ if you will, behind many individuals in high places. But yet she did! Since then, Sharon has interviewed countless women and done extensive research to understand how that could have happened, especially with her strong knowledge of numbers and finance.

Today her mission is to show as many women as possible how to become financially free for the long term, through her “Over Fifty and Financially Free” coaching sessions. She has developed a step-by-step plan to get past all the obstacles that keep women broke and scared … and from reaching the financial peace of mind they so deserve.

  • Odette

    excellent advice for any age Sharon. Thank you!

  • Odette

    excellent advice for any age Sharon. Thank you!

  • Rachelle

    Very clear, very concise, excellent excellent 12345 steps to do NOW!

  • I love it and yes, I would love to post your article on my site. Thank you Sharon. This also helps me for while I am away – Ken has appointments in Edmonton. hugs

  • Denny

    Excellent road map to get on the right track, love how you explain things in such an easy to understand way Sharon! 🙂

  • Great advice, Sharon… and like Denny, I love how  you break it down into a simple to follow road map to savings success!

  • Sharon, you make us doers of what we read! There is now sugarcoating; we just have to do it! Thanks!

    • Unfortunately, there’s no sugarcoating your finances, Olga, as you know!  And the greatest freedom comes from being honest and clear …

  • Judy

    Great post, Sharon, and very relevant to me as I rebuild my life.  This is a critical basic map for everyone.  Thanks for being willing to remind us to create a strong foundation as the #1 priority.  Cheers!

    • Judy, it’s so easy to miss one or two of these “pillars” and then wake up one day to a rude surprise!  Glad this is useful …

  • Dr. Daisy aka Dr. Mommy

    Wow! Sharon this a great post with a list of doable items. Too often we know we must save or pay off our debt but realistically have no idea where to start. Thanks for your candid approach…love it!!

    • Thanks, Dr. Daisy! I try to mix thought-provoking posts with “doable” ones, looking at money issues from all angles for my readers …

  • Sharon, Finally someone recognizes me for the “girl” that I am! What good advice you offer. Too bad they don’t teach all of us this info when we learn about all of the other “girl stuff” we need to know!

    • Michele, it’s criminal that we’re not taught things as basic … and simple … as good financial habits.  Instead we drag all our misunderstandings and twisted perceptions into adulthood and have to learn the hard way.  The resulting vulnerability is what most motivates me!

  • Excellent and I’m implementing NOW! Just started my budget. Starting with ALL outgoing monthly expenditures. Next will be all incoming monies. Credit cards out of wallet and I’m excited because, and I hesitate to admit this, am back to keeping track of my balance in my check register. Now I see how things can spiral out of control when they are “out of sight out of mind”. Thanks, Sharon for these excellent 5 tips in getting a handle on our finances.

    • And I still owe you an assessment, Carla, to figure out where you’re tripping yourself up!  DM me, and let’s set it up!  BTW, check registers are good!  Whatever it takes to “feel” the flow of your money … in AND out.

  • Anonymous

    This list is certainly is not ‘Girl’ dependent This is universal and lists 5 things that EVERYONE regardless of gender needs to have. I thought Edgar Alan Poe wrote about the mascara (or was that the macabre?) And what is a Spanx?!? 😉

    Anyway, i would rearrange your pillars to have #5 listed first! Having a Vision will help make all the other 4 seem more obtainable. Where there is not vision, the people will perish! If part of your vision includes being financially stable, the other 4 pillars fall into line easier.

    Thanks for a great post, Sharon!

    • You’re right, Paul, virtually everything I write about money IS universal.  But because statistics show women to be even less prepared for retirement than men, I’ve focused my message towards them.  (Besides, they’re the ones who have suffered the tortures of Spanx® …)  😉

      And, yes, “vision” is indeed the driver for someone to obtain all the other pillars.  It was just a literary decision whether to put it first or last … since all five are critical.

  • AJ

    Good for the guy’s also.

  • Hi Sharon – this is subject matter that is much needed by young women.  The trick is getting them to listen 🙂 

    • I know, Wendy.  I’m sure someone tried to tell me somewhere along the way, but I sure missed it if they did!

  • So true, these 5 things are so much more important than having the right lip gloss in our purse! Step up and take charge of your finances ladies!

    • Anonymous

      I don’t know, Lori, lip gloss is pretty high up there on the list of priorities.  But right behind that is having an emergency fund … 😉 

  • Sue

    Thanks for the step by step in getting going, Sharon.  Have read bits and pieces of financial wisdom in other places, but nothing that resonates so well; now to take action!  Can’t wait for the day when I can say we are totally out of debt.   Appreciate you!

    • Anonymous

      Sue, being debt-free is heavenly.  Hope this helps you get there!

  • Good article Sharon!  As a CPA I agree with all of it and commend you for putting it in this easy-to-understand and easy-to-implement way that everyone can grasp quickly.  Thanks for taking the time to provide this kind of help to your readers!

    • Anonymous

      It’s what I do, Robert.  😉  I’m driven by the discomfort women feel with money, especially among women who are terrified about what retirement will bring.  And they’re blocked by one or more of the following three aspects of money:  head trash (emotional), honesty with their money (physical) or lack of long-term vision (spiritual).  I work with them to identify where their obstacles are, clear them, and get them on a solid path toward financial security, however they define it.

  • Anne (Annie) Berryhill

    Thanks Sharon! I have been moving into being organized about budgeting and paying down debt…funny how when I think things are predictable and moving in the right direction, some HUGE expense comes up that knocks it all off kilter! Gotta stay focused on the goals, right?

    • Annie, that’s precisely what the emergency fund is for (among other things)!  That way your budget stays intact and you don’t get knocked for a loop.  Congratulations, though.  It’s great to hear you’re actually dealing with budgets and paying down debt.  So many people aren’t …

  • I don’t believe you’re wrong, either, Sharon.  Absolutely not.  It’s finding the time to get all these pieces into place that’s holding me back.  I need a good solid weekend, and just can’t quite seem to arrange it!  It’s necessary, though, and must be done.  Thanks for the very timely reminder…

    • I know they are a bit time consuming to set up, Victoria, but once you’ve structured one and automated it as much as possible, it’s already working for you while you set up the next one.  Think about setting an appointment with yourself on your Outlook Calendar (or whatever you use), maybe 3-4 hours in a block once a month, and tackle one item per month.  And make it a sacred, untouchable appointment!  Some day you’ll be thrilled that you did! 

  • I’ll have to come back with pen and paper to get notes. This “girl” does not have all 5 of these things. Thanks Sharon for making it plain and laying out the steps, now I must take action and do something. Information is great, but information + action = results. Going to get my pen and paper:)

    • Tiffany, do you want to borrow mine?  Anything to get that information into action … 😉

  • Garden4LadyDi

    Sharon, a great piece of writing, but more than that, an honest one because in fact, that is what it means to be a grown up… to be responsible for oneself, to plan and make choices, to save, to cope and to avoid deferring all tough decisions until the future. If someone I knew would accept my “sharing” of this post, and actually take it to heart, we would be better off!

  • Great post Sharon and so relevant to girls and boys!  I think each pillar you’ve spoken about is so critical for overall financial freedom. 

  • Pingback: Quick and Dirty Budgeting()