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Five Things Every Woman Needs to Know About Money Find out the five things women need to know about money. From "Home Made Easy" episode DHME-118

Guest Matthew Heimer joins host Stephanie Lydecker and outlines the five things every woman needs to know about money.

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Matthew shares five things that every woman should know about money.

Five Things Every Woman Needs to Know About Money

1. Pay yourself with automatic savings deposits. The first thing all women should know is how to save for the long term. This means that if you don't have real savings, you need to create a foundation of educated and functional finance immediately. Don't let every cent you earn immediately head back out the door.

   Young women have to be focused on saving for retirement now. The most important step is simply deciding to make savings a priority. A great way to do this is to set up automatic paycheck withdrawal or auto deposit IRA's to save money before you even see it. Essentially you are paying yourself first, before the utility bills, the college loans, or the credit card statements.

2. Map out your financial future with the right financial advisor. Being conscious of what you are saving for the future is the key, but you're right, women must save for particular goals. This is the second most important tip all women should know about money. You need to map out your own financial future. A wonderful resource to shape one's financial future is to find and choose a Financial Advisor. You are going to need to entrust this person with your most personal information, hopes, dreams and goals. That's why the advisor you choose should not only be someone you can rely on, but someone you can talk with opening about your long-term plans.

   Before you choose a financial advisor you should: seek personal referrals from friends or family members, seek professional referrals from your lawyer or accountant, and find out about their fees (if any) before you commit. Also, think about attending investment seminars held in your community, taking a course in financial planning, and doing your research by reading articles and books about money management and/or investment strategies.

3. Stay-at-home strategy—run your home like a business. The third most important tip for women and money is for moms. When you're a stay-at-home mom you have to treat the home like a business. It is very important for a single-income family to keep a hefty emergency fund, just like a corporation. Moms, when budgeting expenses, should be aware that they should have at least three to six months of living expenses in a safe, liquid account, just like a business would.

   As a stay-at-home spouse you cannot apply for disability insurance, but instead you should get life insurance coverage. This is especially true the younger your children are, because the younger your children are the more insurance you will need to cover their care if something were to happen. Also, it is always important in business to keep your job skills up-to-date to get ahead. So consider working at least part-time once your kids reach school age. You may lose much of your wages to the costs of working, taxes, childcare, and community cost, but those losses could be offset by other benefits, such as keeping your work skills current so that eventually when you do go back to work full time that money can go toward retirement.

4. Buying a home alone—don't wait for marriage to buy a home. One of the most common myths is that single women cannot or should not buy a home until they are married. This is our fourth critical money tip. This isn't saying that single women are not buying homes on their own, to the contrary in the past 20 years the percentage of single female home buyers has nearly doubled. This makes unmarried single women the second largest group of home buyers behind married couples. One of the benefits of buying real estate is that you can buy an expensive asset with a relatively small amount of your own cash. This is called leverage. As your home increases in value over time, called appreciation, you earn appreciation on the entire property, not just on your down payment amount. For example, if a $100,000 property were to increase seven percent in one year, the property value would rise seven percent to $107,000. However, the equity would increase 70 percent—from $10,000 to $17,000. This is the beauty of leverage.

5. Married woman's security blanket—always maintain a separate savings account. The most important thing for every woman who is married or is in a long-term relationship is to always keep her own savings. She has to create a security blanket or a nest egg. Now this does not mean it has to be hidden or secret, but it cannot be touched by her spouse or used for any household needs. This isn't mean to be pessimistic, but with the divorce rate at 50 percent, a woman always needs some extra savings squirreled away in case of a marital meltdown.