Many women today find that they are in charge of their financial lives either by choice or by chance. Over the next two generations, women will inherit an astounding 70 percent of the money in this country. When asked the question “Do you feel financially secure?” a high percentage of women answer with a resounding “no.” This is gravely concerning to us as financial advisors. Even though women’s financial power is growing, too many of us are still leaving the financial decision making to others.
By allowing our spouse or partner to take the lead on financial matters, we may effectively reduce or even eliminate our own knowledge of money and finances. This could prove economically crippling in the event of a divorce or death. Does this describe you?
Lessons from our Parents
Many young women grow up getting advice about how to dress and who to date, but few of us get financial education from our parents. However, you may have learned more than you think simply by observation.
If you saw your parents struggle with spending and debt, you may find yourself walking the same road. If your parents were lifelong savers who had a habit of living within their means, your attitude toward money may be wholly different. Watching as they amassed wealth for the future over time may have created a good and realistic model for a healthy way to handle retirement savings.
You may have grown up with very little understanding of the way investment markets or retirement plans work, but the more you educate yourself in financial topics, the more confident and assertive you will become regarding money decisions.
Don’t Set it and Forget it
A recent study found that while women participate in employer-sponsored retirement plans more often than men, only 43 percent of women had an emergency fund and only about a quarter bothered to rebalance their investment portfolios with time. You are off to a great start by participating in your employer-sponsored retirement plan; however, it’s equally important to regularly review how your portfolios are allocated to align with your retirement goals.
Knowledge is Power
When you acquire more financial knowledge, you can shatter money myths that may have crept into your life and replace them with money truths. You can see your financial behavior in a new light and adjust that behavior to give yourself a better chance at amassing significant retirement savings and lifetime wealth.
What steps can you take today toward ensuring your own financial security?
- Talk with a financial professional who recognizes some of the common mistakes female investors make and who will counter them with wise approaches to saving and building wealth for retirement.
- Don’t be afraid to “pay yourself first” in your employer’s retirement plan.
- Embrace some risk in investing – over time, the rewards will far outweigh the degree of risk you take.
- Ask questions and learn about financial matters then… and this is important…pass on your knowledge to the next generation.
If you have any questions about financial or retirement planning, call Lisa D. Jones at 417.447.3500.