There is a lot of bad advice out there for women, financial and otherwise. My heart breaks for the women in my office in their late 50’s that are facing a divorce and have no idea where their assets are or even what they have. Or, for the 25 year old with $100,000 in student loans that hates her career path – but chose it because she wanted to make someone else happy. All of the women in between these situations did what they needed to do at their own financial peril. Fear and regret run rampant.
Fortunately, I also get to work with women that have an entirely different reality with their money. They have a good relationship with their finances and feel in control. Professionally, they are doing what they love. Their financial security isn’t necessarily dependent on a partner. Most importantly, they feel that they have power over their future.
The good news is that if you don’t have the relationship that you want to have with your finances, you can make small changes that could have a huge positive impact.
My Best Piece(s) of Financial Advice for Women:
Start somewhere. Even if it’s small, even if you have debt, start somewhere. I went to a gym and the trainer asked me to do 10 pushups. They nearly killed me. But, every time that I went it got easier, and then I started to see some muscles (!), and I actually wanted to do more, so I started doing 15, and then 20. Saving is the same way – as you start to see success it feels good and it makes you want to do more. When you have a good emergency savings cushion built up, then you can start investing for your future. One simple trick; most employee sponsored 401(k) plans have an option to increase your contribution automatically. It doesn’t hurt as much when we can’t see it happening – do this in small increments monthly until you are at least to your employer’s match.
Take care of future you. This one really sucks sometimes. Especially because my best friend just asked me to take a girl’s trip with her to Miami and my daughter just asked me for a pair of jeans from that store in the mall where everyone smells delightful and looks like a supermodel, that cost an arm and a leg. I’ve got a good credit limit, it would be really easy to say yes to both. It’s hard to say no. I have a hard time saying no to things that I don’t want to do (I’d love to go to my neighbor’s daughter’s piano recital, really…), so it makes sense that it’s hard to say no to the things that we actually want. And, our brains are hard-wired to reward us for spending money. Heart says we need it, brain justifies it. Rinse and repeat. The problem with debt is that we are actually just stealing money from our future self – “Hey, 50-year-old Brook…I need a few grand…and go ahead and add a ton of interest…cool?” Not cool. Future me is going to want to do great stuff like send said daughter to college – so that I have time to take that cool trip to Miami with said best friend.
Mind the time away. I love my work. I’ve always been a “worker” – I got used to the promotions and the accolades and the money and I really liked it all! So, imagine my surprise when I had my daughter, took my maternity leave (Don’t worry, I’ll be in touch throughout – call me whenever, and I’ll check emails!), and on the day I went back to work, I physically could not leave her. I sat on the floor at her daycare rationalizing through my tears. I checked my watch, and it was 9:30 and I started to panic… then I cried some more. I sat on that floor, eye to eye with my 6-week-old baby in her car seat, and ran numbers – all of the numbers. There was no way to make it all work. So I picked her up in her car seat and drove to my office, went up the elevator, and sat her car seat on the chair next to me as I told the Vice President of the credit union that I worked for that I didn’t know what to do. She said, “do what you need to do”.” So I did. I took her home. I called my husband and told him that we would be making some major shifts in our lives. Thus beginning the most challenging and rewarding time in my life.
There are a lot of women that take time away from the workforce to raise their children or to care for their parents or a loved one. It is more common than not that we will take time out of our earning years at some point. Plan for this on the front end, and set aside money to close the gap. Many couples agree to mom staying home to raise the kids, but it’s not really fair that we can’t contribute to our retirement accounts during that time, so the IRS has a rule for stay-at-home parents called a “Spousal IRA”. A Spousal IRA is just a regular IRA, the name just refers to the fact that the spouse that is employed outside the home is making the contributions.
Know the numbers. I’ve read all sorts of statistics that prove that women earn less than men almost all the time for doing the same job. Add that to the time that we take away from our jobs to take care of everyone (not making money), and the fact that there are probably more CEO’s named “John” than female CEO’s in the workforce. Oh, and by the way – we live longer – meaning we start with less and we need more money to survive. It’s enough to drive you (and me) crazy. But wait – did you know that when women do invest, they tend to do better than men? And, did you know that the youngest millennial women are out-earning their male peers? Maybe most importantly, there are women like you and I that care and support each other.
When we know the challenges that we face and we know what we want our future to look like, we can put together a plan. Working with a Wealth Advisor can help. A Wealth Advisor can develop a personalized strategy based on your numbers. They can help you identify what it is that you want to improve, develop or change – and hold you accountable. We’re here to help!