Whether you are single or married, or have children or don’t, as a woman, you need to pay attention to money and know enough to take care of yourself or others when or if the need arises. The reality is, on average, women tend to live longer than men and more than 40% of marriages end in divorce. Women are also more likely to have inconsistent work histories as a result of taking time off to care for children or aging parents. In addition, we make $0.79 on the dollar compared to men, and we’re probably more likely to need long term care services in our old age (since our spouse is likely to pass before us). All of these are reasons that contributed to my wanting to become a financial planner both to help myself and empower other women, so I’ve compiled five things you should consider that have helped me along the way.
1) Stop assuming your spouse knows more about finances than you.
In my years as a financial planner, I’ve heard over and over again, “Oh, my husband handles our money. I don’t really know anything about it.” While I completely understand that one person in a relationship is likely to be more involved in the family’s day-to-day finances, it’s important that both of you have at least a basic understanding, especially if neither of you is a financial professional. I strongly encourage whomever is not engaged in the family’s finances (especially if that’s you, ladies!) to at least know how much income you have coming into the household, how much the two of you have in savings and investments, where it is, how much you’re saving each month and at least a rough idea of how you’re invested and what you’re spending.
If your spouse is working with a financial advisor, make a point to attend the meetings. Even if you don’t understand what’s going on at first, you can always ask questions and at least be a part of the conversation. Use this helpful list of questions for financial advisors from NerdWallet to get you started. You don’t want to be caught off guard if one day your spouse is no longer able to take care of the finances.
2) Educate yourself.
There’s a reason our company slogan is “With knowledge comes confidence.” It’s true. There are two main reasons I’ve found that women don’t get involved in financial matters: lack of confidence and risk aversion. We’ll talk about the latter in #5. Lack of confidence typically stems from feeling as though you don’t know enough to have an opinion. If that’s the case, then start by learning the basics and build on your knowledge over time. No one expects you to become an expert in all things financial overnight. Make sure the information you’re reading is from reputable sources. A great place to get started is Money Magazine’s Money 101. Worley Erhart-Graves also offers free quarterly workshops that can educate you on retirement planning, financial planning, and the stock market. You can attend these and get practical advice from women just like you.
3) Don’t be afraid to negotiate.
I get it, negotiating for anything is tough. I still cringe at the idea, but at some point, you just have to know your worth and go after what you deserve. Working in a male-dominated industry, I have firsthand experience watching many men make a larger salary than I did with the same or less experience and education than I had. The only choice I had, in order to look out for my own best interest, was to attempt negotiations. It wasn’t easy, and I didn’t get what I first asked for, but I also didn’t get fired and was able to move up in the ranks once I started seeing my own potential and negotiating for better positions with better pay.
Women already tend to make less than 80% of what men do for the same jobs, so we should all be a little less afraid to negotiate. If you’re not prepared to ask for a bigger salary, then why not ask for some additional time off or other benefits like stock awards? Read up on good negotiation techniques, like these from the Harvard Business Review, and practice before you sit down for a meeting.
4) Failing to plan is the same thing as planning to fail.
If there’s anything I’ve learned over my (almost) 35 years, no statement is truer than this. It applies to just about everything in life. Spontaneity can be great sometimes, but when it comes to your financial life, I strongly believe that everyone (yes, men too) needs a financial plan. In my experience, the ultimate goal for most people is financial independence, and a goal without a plan is just a wish.
If you’re saving and investing, how do you know if you’re saving enough? Are your investments allocated properly for the amount of risk you want to take on? Do you have enough and the right kinds of insurance? What about estate documents? Are you spending too much? How can you protect your identity? Should you be doing something different with your employee benefits? All of these questions, and more, can be answered in a comprehensive financial plan. If you’re just starting out, beginning with a basic budget is going to be your first step. If you’re not sure how to continue with the rest or need help putting all the puzzle pieces together, consider working with a CFP® professional to make sure you’re on track to meet your goals.
5) Get out of your comfort zone.
It’s no secret that women tend to crave security when it comes to all things financial. This can make us more conservative investors than we should be while we are still young, or it may even make you shy away from investing at all. If we’re not making as much as men and need to save more because we are going to live longer, shouldn’t we be more willing to take on risk with our investments to maximize growth?
Don’t let the “bro” mentality related to Wall Street and investing deter you from investing the way you should. According to this study from Fidelity, women already make better investors than men. If you are worried about your investments or want to know how to invest, talk to someone you trust, preferably a CFP® professional that can help answer your questions and ease your fears about investing. It’s important for your future.
Even if money isn’t your “thing”, you can still be informed enough to understand your finances and be more involved. I urge you to commit to yourself that you’ll take at least one step toward bettering your financial future in the next 30 days. Lastly, if you take anything away from this article, please let it be the confidence to take your well-deserved seat at the financial table.