Seven Things Women Can Do to Enhance Their Financial Lives
Women are taking on more responsibility for their financial lives compared to previous generations. There are several reasons why this is important. In the past, women have typically worked less than men as they were the primary caregiver, which means they had fewer opportunities to contribute money in retirement plans, savings, and investments. Even if they were working just as much, they weren’t getting paid as much, as is still true in many cases today. Women on average live longer than men meaning they need to plan for a longer time horizon. Lastly, between same-sex marriages, the divorce rate of 50 percent, and women lead households, research shows women will be responsible for more of the world's assets than men in short order.
It’s so important, now more than ever, that women make sure they are taking an active role in handling their finances so they can feel confident about their financial future. Here are five steps for women to take to kick-start their journey to getting a better grip on their finances:
1. Set Goals
As the old saying goes, if you don’t know where you are going, how will you know when you get there? You don’t have to have perfected goals to at least have a general idea of the direction you are going so that you can determine what it takes to progress there.
2. Decide if you need professional guidance or if you want to go it alone
Whether working with a fee-only advisor that shows you their compensation or someone that wraps it into products, it is no secret that working with an advisor has a cost associated with it. We find that most people get far more value in their financial success than the costs of working with us but that isn’t right for everyone.
3. Educate yourself.
Whether you elect to go with an advisor or not educate yourself by reading and researching basic personal finance topics. Of course, you’ll want to make sure you are consulting reputable sources. There is a lot out there to learn, but often taking the first step is the most difficult part. It’s a lot easier to make informed decisions when you have the information, to begin with.
4. Make a budget.
It’s important to know exactly where your money is coming from and where it’s going. Having a grasp of your cash flow will empower you to decide where your money goes, instead of it controlling you.
5. Plan for the unexpected.
The unexpected should not be unexpected. Emergencies WILL happen, and it’s best to prepare for when they do. An emergency will not hit you as hard if you have a cushion to soften the blow.
It’s never too early to start thinking about retirement, and it’s going to come quicker than you think. Make sure you are taking advantage of any type of employer-sponsored retirement plan or contributing to an individual retirement plan.
7. Ask questions.
You will probably have lots of questions, and that’s OK! Take advantage of every resource available to you and consult the experts when needed. Taking good financial care of yourself, your loved ones and your future are one of the best things you can do.
-Leighton Lindstrom and Marshall Rathmell-