Financial Literacy

Women: Take Control of Your Financial Future

Take Control of Your Financial Future

Recently, Business and Tech asked me to participate in a panel of experts for an article called “Taking Control of Your Financial Future.” Below are some of the key points I shared during our discussion, which focus on the specific personal finance issues women often face.

I think all women can benefit from working with a trusted financial advisor if they need help managing their personal finances. A fiduciary financial partner can help you set financial goals, allocate and invest your money, and develop strategies to grow and preserve your wealth. However, there are certain things all women can do to take control of your financial future, whether you choose to work with an advisor or not.

#1: Take Ownership of Your Finances

My first piece of advice for women is to take ownership of your finances. Don’t depend on a relative, significant other, or spouse to make financial decisions on your behalf. 

If you’re married, consider taking a team approach to managing the household finances. Ultimately, being looped into these key financial decisions will give you peace of mind, especially if you lose your spouse.

#2: Seek Feedback from Other Women

Another way to take control of your financial future is to talk to other women about how they handle their money. Find trusted friends or create a money circle to talk about money issues and financial topics. Or there are money coaches that you can hire to work through your money issues.

#3: Be Your Own Advocate

Women need to be our own advocates. Despite the progress we’ve made, we still earn less than men, on average. In addition, we often must choose between being a caretaker and pursuing a career. These factors can significantly impact your ability to retire on your own terms, especially if you’re the primary earner in your household.

To ensure your compensation is fair, ask for more benefits or a pay raise when you feel you’ve earned it. Keep a record of your contributions and any metrics that demonstrate the value of your work.

And most importantly, don’t be afraid to negotiate your salary and benefits when accepting a new job. In many cases, negotiating your starting salary is your best opportunity to meaningfully increase your income.

#4: Find the Right Balance

If you have a family, juggling your home life and work life can feel like a never-ending challenge. To ensure your financial future doesn’t suffer as a result, you need to find a healthy balance.

First and foremost, seek out employers who have family-friendly employee benefits. Look for organizations that have good gender diversity among management and employees. These types of employers typically offer work-from-home, tele-commuting, family leave benefits, and even daycare. In some cases, they may even offer part-time work to support working parents.

In addition, talk to your spouse or partner about sharing childcare and household duties. Set up systems and schedules so each person knows their role to keep things working smoothly. If possible, ask local family members if they are willing to help.

It’s often helpful to set strict boundaries for your time at work and set expectations accordingly. Let your employers know it’s important for you to attend certain family events, which will keep you from working overtime. And be sure to stick to these boundaries yourself, even if you’d love to work just one more hour on that project.

#5: Invest in Your Future

Lastly, educate yourself about investing and be willing to invest to secure your financial future. Keeping cash in a bank will not beat inflation over the long run but buying stocks will. You don’t have to invest beyond your comfort level. However, it’s critical to find the right mix of investments to stay on track towards your financial goals.

For more personal finance tips, you can read the full Business and Tech article here.

Curtis Financial Planning specializes in the unique financial planning needs of independent women and women who take the lead in their household finances. If we can help you develop a plan to take control of your financial future, please schedule a call.

In the meantime, check out our personal finance resources, including The Happiness Spreadsheet, a fresh, inspiring approach to budgeting for women.

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The Importance of Financial Education

Photo Credit: Edwin Andrade, Unsplash

It’s a well-known fact that America has a huge financial literacy problem. The causes of this lack of financial knowledge are often cited as a deficiency of personal finance education in schools or at home. Personally, I would love to see personal finance as a mandatory senior year high school course. I think it would reduce the rate of debt mismanagement in college – both credit card and student loan debt; start young adults on a path to good credit early; and decrease the anxiety of knowing how to handle money as young adults.

A Course in Personal Finance
Recently, I was asked to teach a personal finance class at a local college. I was thrilled for the opportunity and worked diligently on the syllabus, the curriculum, and the slides for the four summer classes. 16 students signed up for the course, 6 of whom need the credit for their MBA degree. The average age of the students is 28, and mostly women.

The most surprising aspect of my experience is the enthusiastic response from the students to the subject matter. The first class focused on personal budgeting and retirement plans. To get these young people thinking critically about their spending, I had them read an ebook I wrote called the Happiness Spreadsheet (a free copy can be downloaded from my website). The book espouses the idea that if you think consciously about the relationship between your spending, what you value, and your happiness, it is easier to create a budget that will stick. Many students had never looked at their spending habits in this way, and it inspired them to do the work.

Learning About Retirement Plans
When it came to retirement savings plans, I was less surprised by the elementary knowledge of the majority of the students. Earlier in the class, I asked them to rank their financial literacy from 1- 10. The average response was 5. I was encouraged when two of the students immediately acted and opened up Roth IRA’s the following week, and others expressed greater interest in how their 401(k) was invested.

In the second class, I focused on credit and debt.

Some of the students had already experienced credit woes. One woman misused credit cards in college but was able to dig herself out and rebuild her credit. She has a credit score over 700 now. Another got into credit trouble after a divorce. She managed to bring her score up from the low 600’s to 700 by diligently going through her credit report to get joint accounts paid off and closed. Another student has stellar credit with an over 800 score. Her goal is to buy a house and has asked for help in reaching this goal.

Future classes will focus on investments and retirement planning. In the end, I will be happy if the students learn 3 concepts from the course:

1. The tax benefits and flexibility of the Roth IRA.
2. The benefits of saving early and the power of compounding.
3. How important it is to build good credit.

Of course, there is so much more to having a successful financial life, but if acted upon, these three concepts will lay a great foundation.

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