Take Charge of Your Finances - Take Charge of Your Life
Statistically we live longer than men and earn less. We're often faced with discrimination in terms of wages and advancement opportunities. All of which means we have to work harder, save more, and be our own advocates.
So I'd like to encourage women everywhere to take charge of their finances as an important step in negotiating a better situation for themselves and their families. To me, financial independence is empowering. By taking charge of your finances, you're taking charge of your life. Here are some ideas on how to do just that.
1. Make retirement a top priority
Women are known to put others' needs first, but when it comes to retirement, you have to think of yourself. Take charge of your own financial future by taking full advantage of a company retirement plan. Contribute at least up to the company match, and much more if possible. The point is to save as much as you can, as soon as you can. It is never too late to get your financials in order, to know what you have and how to make it grow.
2. Don't just save—invest
Part of that preparation is making the most of your money, and that likely means investing. Your first thought may be that you don't want to take on the risk. But while stock market downs are definitely a reality, there's also a risk in being too cautious. Not investing in the stock market can mean missing out on long-term gains that can help you achieve your goals.
For a goal like retirement with a long time horizon, you ideally want a diversified portfolio that has the potential for growth. This means having a portion of your money invested in the stock market and accepting the almost certain market swings. While that can sound daunting, it doesn't have to be if you keep your eyes focused on your end goal. And you don't have to go it completely alone.
3. Team up with an advisor
When it comes to investing and managing your money, having a support team can be a great confidence booster. Even if you're just starting out—and especially as your assets grow—consider working with an advisor. I think of a financial advisor sort of like a personal trainer, someone to guide you and keep you going when you might feel overwhelmed or tempted to call it quits.
An advisor can help you look at the big picture and build a portfolio to match your goals. Plus, working with an advisor who understands you can be a major source of peace of mind. So think about the type of person you'd be most comfortable with. A lot of women prefer to work with a female advisor.
Of course, how often you want to interact with an advisor is up to you—a one-time consultation or periodic check-ins, in-person or virtually. Just make sure you understand how and how much your advisor is paid. Costs matter.
4. Have a financial plan
To really get on top of your finances, you may want to work with a CERTIFIED FINANCIAL PLANNER™ (CFP®) professional to develop a comprehensive financial plan. A recent study published in the Journal of Financial Planning found that households working with a financial planner made better overall financial decisions.
I'm a huge advocate of a comprehensive financial plan because it goes beyond saving and investing and helps you look holistically at all the interrelated parts of your financial life. It reviews your income, expenses, investments, retirement planning, insurance needs, income taxes, estate planning needs, and—most importantly—how they all work together within the context of your goals. Plus it gives you a roadmap to follow and a plan of action.
It starts with you
Financial independence isn't just about how much money you have. It's also about having the confidence to make your own decisions. Female or male, single or married, we all need to be in control of our financial lives. But women especially need to take greater charge. By doing so, we can each be part of the drive for a gender equal world—for ourselves and for future generations. Here are some women to listen to:
Carrie Schwab Pomerantz
Carrie Schwab-Pomerantz, CFP®, is a leading advocate for financial literacy and one of America's most trusted sources for financial advice. She has devoted her career to helping men and women from all walks of life achieve financial security.
Suze Orman has podcasts to advise women about all aspects of money.
www.bestfinancialplanners.com.au have a list of Australia’s top women advisors, the first is Olivia Maragna who works in Brisbane.
Olivia Maragna