When I set the spreadsheet in motion, I found my groove, paying everyone and their mother, and then I took a step back. This getting-out-of-debt thing is awesome, but what about my future? Without my 401(k), I was screwed. What would I do, work until I dropped dead?
No. That would not be me. Retirement was — and is — very important to me. I want to write books until I drop dead for sure, but that’s not work. Sometime in my sixties, I want to peace out of clock-punching and travel around with my laptop, banging out brilliant words.
That being said, I didn’t know the first thing about 401(k)s or how to save. Before, when I was contributing to my 401(k), I was automatically doing so through my job. I didn’t think about it. I needed to do my homework and maybe talk with some smart people who could explain to me what I needed to know in very simple terms. To the Internet I went.
What I found is that women are decidedly not the audience the financial and retirement industry prefers to talk to. If anything, we are talked down to, more so than our male counterparts. I talked to multiple financial advisors (old white guys in suits), but felt like I was being patted on the head. The nerve.
It didn’t make sense to me. We women are a totally neglected audience. Yet we historically own the purse strings for the household. How the does that math work? Did you know that we are not even the primary decision-makers as it applies to retirement? Only 35 percent of women are.
Fortunately, I found amazing women writers online — women who were experiencing the same frustrations but were paving the way for other math-challenged ladies like me to learn about retirement and savings. They helped me demystify the subject. I learned about compound interest (which has become my favorite thing). I learned about bear vs. bull markets. Scary things that were totally fluffy bunnies in wolf suits.
I started my sparkling new and shiny baby 401(k) plan early last year, with a measly 4 percent pre-tax contribution from each paycheck. I didn’t even see a dip in my take-home pay. So I bumped it up to 5 percent. Then I saw a $2 loss in pay. It became yet another game to me. I was excited and wanted to get to a double-digit contribution. So I upped my contribution to 10 percent, then to 15 percent. You know what? I actually received a bump in income because it dropped my taxable income just enough to fall into a lower tax bracket (read: less taxes taken out). So I was saving 15 percent each check, while seeing more money in my pocket. Every penny counted because I still had debt to pay. (Now, it’s down to about $60,000.)
No one told me I could save money and have it positively impact my cash flow.