Why controlling your finances (and ‘how’) is important for start-up life

Lorna Kapusta   VP of Women and Investing at Fidelity Investments

Lorna Kapusta
VP of Women and Investing at Fidelity Investments

I lead the women and investing efforts at Fidelity Investments and I am very passionate about what I do every day (just ask my team!). Why? Because only 44% of women are investing outside of a retirement account to help grow their wealth1, which means 56% are leaving their money in cash — barely growing and a huge missed opportunity!

Well, that’s got to change, and Fidelity is focused on helping women take a more active role in their financials so they feel: in control, confident to take steps to grow their wealth, and more empowered to fulfill their dreams; for many, that means starting a business.

As I look at the funding gap in women tech start-ups — I feel just as passionate about helping to drive change and am so excited that Fidelity is a proud supporter of the Quesnay Female Founders in Tech competition program. I am thrilled to be a judge for the program along with many of my colleagues who are engaging as judges and mentors. In fact, this program is only one of the many ways we collaborate with and support start-ups on a wide range of technologies.

We have the Fidelity Center for Applied Technology (FCAT) which researches and explores new technologies as well as Fidelity Labs, our in-house incubator for fintech start-ups and innovation ambassadors that meet with emerging start-ups.  We also collaborate with Stanford d.school, MIT Media Lab, TEDxBoston and MassChallenge to encourage new ways of thinking, design and innovation with students and start-ups. Last but not least, the Fidelity Accelerator connects us to emerging, high-potential firms from which we can learn and also lend our expertise.

So as a woman speaking across the country on the topic of women and money — I am often asked, tell me what I need to do to take control.

Here are five steps that can help you get started:

 

5 Steps to controlling your finance

 

#1: Write down your goals

This will help you understand what goals you are already tackling and what money is left for those not on the rest of the list below (for many of you that will be starting and growing your tech business – exciting!)

#2: The B word – yes Budget.

Know your income (cash flow in) and your expenses (cash flow out). A general rule is to not spend more than you make. Fidelity has a simple 50/15/5 rule you can use here.

 

#3: Pay off debt.

Not all debt is created equal, but one rule of thumb is to put priority on high interest rate debt, like credit card debt.

#4: Set up an Emergency savings.

Save up at least six months of your monthly spending.

 

#5: Start saving for retirement.

If you have a retirement account through your employer, start there.  If you don’t, look to set up a retirement account. The value and compounding potential of this money over time is meaningful.

 

In summary, having your personal finances in order is a foundational step towards being prepared to launch into your start-up. Feeling in control of your money has a positive influence on your mind and body and can lead to freedom, empowerment, and confidence to follow our dreams. We are so excited to be a supporter of the Quesnay program — our hope is that we support these women to achieve their goals financially and professionally.


1) 2018 Women and Investing Study, Fidelity Investments
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