Live Within Your Means No Matter What You Earn

Feature article from The Engage Reader III

By Zarifa Brown Reynolds

Surprisingly, one of summer’s social media trends is empowering people to save money by passing on expensive social events and even bragging about it. By embracing the “loud budgeting” TikTok trend, people are vocal about why they’re choosing not to spend money on things like dinners out or vacations with friends — even if they can afford it.

I embrace the spirit of this trend because it helps us set financial boundaries as long as we still find ways to experience joy with friends and family. It helps remind us that every choice we make — to indulge or not to indulge, to invest or to sit on the sidelines — matters for our future financial security.

Women should take a long-term view of their financial health.

Research shows that women are now the sole or primary breadwinners in more than 40 percent of American households, and they contribute to household income by another 20 plus percent.¹ It is critical for women to protect themselves and their families so that they can sustain their financial well-being into their golden years and beyond.

Unfortunately, there are specific financial challenges that women often face more than men. Women typically live longer than men, according to the US Centers for Disease Control, which translates into a need for more robust savings to sustain them through additional years of retirement. Despite strides towards equality, women continue to earn less over their lifetimes compared to men, the Pew Research Center reports. This leads to smaller contributions to retirement accounts and lower Social Security benefits.

As a society, we must reverse these outcomes (policymakers certainly have a role to play here, too). It is also imperative that women adopt a proactive and informed approach to financial planning. Starting early is key, and even modest savings can grow significantly over time. 

Make sacrifices early on to build long-term investments.

I came from a family that barely scraped by. If I wanted to buy something that was not a necessity, I had to figure out a way to pay for it. These early life experiences have profoundly impacted the rules I live by to achieve financial security.

For me, I knew that the journey toward a secure financial future for women is fraught with systemic hurdles. This is why I invested in myself from a young age.

Early on, while I knew when to spend in order to improve economic outcomes, sometimes I did fail. Today, when I choose to make a big expenditure, I make sure I can justify why I am doing it and ensure it aligns with my personal goals and core values. 

One area in which I did not sacrifice was childcare. I wanted to work, I wanted a career, and I knew that I needed help at home in order to excel in my job and continue building a nest egg for my family. So, I chose to invest in a full-time caregiver for my children.

Make deliberate choices that keep you within your means.

I went to law school after college, which meant taking on more student loan debt. One of the factors in deciding where to attend was whether the school would forgive my student loans if I decided to practice law at a nonprofit organization. I did not know where I would find myself after graduation, but I knew I needed to think ahead to ensure I could pay the bills no matter what career path I chose.

After graduating, I moved to New York, where I ended up in private practice and still had hard financial choices to make. While many of my associates chose to live in Manhattan, I knew that my biggest expenses were rent and taxes, so I chose to rent a small apartment in a less desirable neighborhood.

That sacrifice mattered. I was able to pay off all my private higher interest rate student loan debt in that first year. It was not easy, but that choice set me on the right path.

Understand the value of long-term investments.

I have always tried to maintain that sense of responsible, long-term choices as I built my income. In my 30s, I had the chance to either take a bonus as cash or put it into a retirement account. I was busy trying to build my career and raise two children in Manhattan. I certainly could have used that extra money, but I chose to leverage the retirement option instead. Through this experience, I will always suggest maximizing contributions to retirement accounts to ensure that every dollar is working towards your future security.

When I look at that account now, the security I feel is worth much more than any designer stroller I could have purchased.

Fortify the dreams of your family.

Beyond immediate financial needs, life insurance can be a lifeline for your family’s long-term financial stability. It can replace lost income to help your loved ones continue to meet their financial obligations, repay debts, pursue education, and help maintain their quality of life.

View the full issue of The Engage Reader III

Ironically, considering my position today, I did not buy life insurance until I was in my early 40s. When I was younger, I thought I could not afford it. As I learned more about the protection life insurance offered — and that premiums are usually more affordable the younger you are — I knew I needed this tool. Now, when it comes to investing in products or services that will improve my financial security and protect my family over the long-term, I do not hesitate. 

Use your social network to advance your own economic security.

I became CEO and President of Royal Neighbors of America in January of 2023. Royal Neighbors was founded in 1895 by nine strong women as a mission-driven nonprofit insurance organization and one of the first to offer life insurance to women. Today, we are a successful organization dedicated to empowering women and local communities. 

One of the many lessons I take from this band of mighty ladies is: Who you choose to spend time with matters. If your friends brunch, binge, and buy, buy, buy on a regular basis, you are more likely to do so, too. 

Now, I am not saying you should get rid of all your friends if saving is not a priority for them. But do try to find at least one ally who honors your financial goals and helps you live within your means by packing lunches to eat on a park bench or having girls’ nights in instead of out. 

At Royal Neighbors, we encourage and reward women who are trying to advance and empower the economic security of people in their communities. Through our Nation of Neighbors Award & Grant Program, for example, we support the Clothing Center at Minnie’s Maison, a volunteer-run nonprofit organization that provides free clothing to anyone in need, from refugees to people experiencing poverty and homelessness. Founder and former investment banker Linda Lannan focuses on building the self-esteem of Minnie’s Maison clients so they can feel good as they go out into the world to reclaim their financial security.  

According to an AARP poll from early 2024, 48% of U.S. women aged 50 and older said their financial circumstances fall short of what they had hoped for at this point in their lives. More than half, 54%, said they do not think they will have enough money to retire when they want to. By making sacrifices and deliberate choices to live within your means, understanding the value of long-term investments, and using your social network to advance your economic security, you can face the future with confidence.

[1] Glynn, Sara Jane. Breadwinning Mothers Continue To Be the U.S. Norm. CAP20 Report. May 10, 2019. https://www.americanprogress.org/article/breadwinning-mothers-continue-u-s-norm/. Accessed July 23, 2024.