My mom was widowed at age 48. I have 3 sisters. I know how difficult it can be to be a financially independent woman. I’m passionate about helping women feel secure and confident in handling their personal finances.
The majority of financial planning applies to all individuals, but there are some specific considerations for women:
1. Be involved
Being involved in the goal setting, budgeting, saving, and investing is most important. You should never assume someone else is planning for you. Your goals can’t be reached if they aren’t considered. If you are married you may have to make some compromises, but at least you will have a say. Both the husband and wife are involved and take ownership in the ideal financial situations I witness.
2. Have a plan
Having a financial plan in place will give you the best chance of reaching your goals. You should build a plan based on your short term and long term goals and make sure it is updated as your situation changes. Figure out what your future expenses may be and make sure you are saving enough to meet those expenses. You should maximize employer benefits and retirement plans to receive tax deferrals and employer matches, profit sharing contributions, and insurances. Make sure your investment strategy is tied to the investment return used in your projections. Having a plan without implementation or without a regular update will not be effective. Financial planning is an ongoing process that requires your participation.
3. Have insurance
‘The worst case scenario can happen, and you’re rarely expecting it. If your spouse is the primary earner make sure there is enough life insurance and disability insurance to be prepared for the worst. It can be challenging to reenter the workforce and replace income in times of hardship. You should make sure there is enough to pay off big bills, such as your mortgage and college educations, and enough to produce income that will replace lost wages.
4. Maximize Social Security
Make sure your social security benefits are maximized. The age you take social security can have a major impact on your benefits. Women’s life expectancy is longer than men’s. You want to ensure your benefits will be maximized if you outlive your spouse.
5. Monitor your risk
Make sure your investments are tied to your goals, not a random stock pick or a whim. Make decisions based on education and fact, not short term market fluctuations or fears. Your portfolio may go up and down over time, but having an allocation that is tied to your goals will keep you from making short term or reactive decisions.
6. Have an estate plan
You never know what life will bring. Do not leave circumstances to chance. Having an estate plan will allow you to choose guardians for your children, decide where your money goes when you die, and be proactive about making sure What’s left behind is not a financial burden on those you love.
I want you to feel empowered financially. Find an advisor who makes you feel comfortable and is about more than wealth management. Financial planning is an ongoing process and building a relationship with an advisor where you feel heard and supported is most important.
This post was originally posted by Jim on Paladin Registry.
