Women and finance is a hot topic with intriguing statistics. According to a research done by Vanguard, women make about 70% of household buying decisions. Nine out of ten women will manage their own finances at some point in time over their lives due to divorce, death of a spouse, marrying later in life or an intentional decision to remain single. By 2020, 67% of personal wealth is expected to be controlled by women because women are earning more than they ever have. We are graduating from college at higher rates, becoming business owners and executives, and many are becoming the primary wage-earner in their home.
Women now represent about a third of the family breadwinners. However, a majority of women still let their male partner handle the larger financial matters for the family such as retirement planning, estate planning and handling the investments. While the women frequently write the monthly checks and handle a majority of the shopping, they often do not involve themselves in the bigger picture.
Women sometimes tend to feel more insecure about money or less confident than men. In reality, the women know more than they give themselves credit for. While in other areas of our lives, women are in a place of authority and self-assurance, when it comes to money, sometimes we tend to back ourselves up and look to others for direction, doubting our own abilities and knowledge.
What can we do to improve our financial navigating skills? There are articles about personal financial planning in so many magazines and newspapers you pick up these days. Pay attention to them. Many are very short and direct and simplify the complexities of financial planning. Knowledge will add to your confidence. Here are some actionable steps to help increase one’s financial knowledge:
- Discuss money and your financial plan with your partner on a more regular basis.
- Collect an inventory of your assets and enter them into a personal finance program such as Quicken, Kiplinger’s Money, Personal Capital or Mint.com. Review your budget on a quarterly basis together.
- Examine your retirement plans, what you are each contributing and whether it is enough to reach your retirement goals. If available, take advantage of the retirement or educational sessions your employer may offer.
- Attend meetings with your financial planner together or call your planner with your individual questions. Review your investment statements with your advisor to make sure you understand what you are reading. (Make sure there is transparency and understanding in how your advisor is being compensated.)
- Speak up and ask questions even if it feels uncomfortable. You should have a level of trust and mutual respect with your financial planner. There are no stupid questions when it comes to your investments!
Knowing the financial picture ahead of time can help with unexpected devastating life events such as an unexpected death of a spouse or divorce. Having the knowledge foundation ahead of those events will help you maneuver the financial implications. In the same way, knowledge will give you the confidence to move through the stages of your life such as having children, buying a house, college planning and then retirement and estate planning. Making these topics a part of your everyday conversations will improve your confidence when it comes to finances.
We are in our sixth year of “Women’s Conversations” at Altavista – a series of programs we hold in house every 6 to 8 weeks. The years’ program is based on the brainstorming session we do in November of each year. Our clients and friends create the agenda themselves and then the Women of Altavista provide the program and outside speakers when necessary. It is a comfortable and open setting. We encourage all questions and sharing when relevant to the program. We have learned we can all learn from each other. If you would like to attend one of these sessions, please call our office.