Finding Financial Confidence At Any Age

[Michelle Matson]

As a woman in the financial industry, I find myself frequently frustrated that most of the articles published about women and money concentrate on the negative. Is there an income gap? Yes. Do women face challenges when it comes to retirement? Sure. But – HELLO… women are making huge strides in the areas of income and wealth. So instead of focusing on the negatives, let’s draw attention to how we can help women make the best of the financial circumstances they have.

By focusing on what each individual woman can do to make her financial situation successful, we encourage females to take responsibility and be proactive about their finances. By improving the lives of the women we work with, we can make a much bigger difference than if we waste energy by focusing on the negative and lamenting the cultural challenges women face.

According to recent data from the IRS, nearly half of all individuals with at least $500,000 in investable assets are women. In addition, nearly 40 percent of the “top wealth holders” (defined as those with assets of at least $625,000) are women. I find this to be exciting news for all women and what it says about our future.

Every woman is unique, but getting started on the road to financial independence can be managed by most women. No matter if a woman is single and working, married with children, or suddenly single as a result of divorce or death, there is never a bad time to step up and get a grip on your financial situation. Below are some strategies for women of varying financial backgrounds:  

• Young, working women. Obviously, younger women have an advantage because their investment time horizon is longer. However, being younger also makes retirement seem like less of a reality and can make it easy to put saving and investing off until “tomorrow.” Younger women in the workforce should enlist in 401(k) options early and create an emergency savings fund that can cover unexpected expenses.
• Married with children. Women who are married with children face a different set of distractions which include a hectic schedule and trying to be all things to all people. For women who stay in the workforce during this time of life, set aside at least 10 percent of your paycheck to allow your retirement fund to grow substantially. Also, make financial decisions with your husband and work together to meet financial goals for the family. Have realistic expectations on what you both can afford to save and spend. 
• Suddenly Single. Considering that 90 percent of all women will be solely responsible for their finances at some point in their lives, all women need to prepare for the possibility of becoming surprisingly single. The days of deferring to the man in our lives to take care of the “complicated” part of the finances or the investments need to be retired. All women need to be prepared to face financial challenges alone at some point. Work with an investment coach to create a financial roadmap that can help keep you on track with financial decisions.
• Late Bloomer, Baby Boomer investor.  A 2006 study sites that 58 percent of baby boomer women have less than $10,000 in retirement. While this is a stunning statistic, it does not mean that there is no hope for these women – when it comes to saving and investing, every day and every dollar counts.  Take action, plan ahead and enlist strategies such as maximizing your 401(k) and creating a solid budget that can help get you on track to a better financial future.  

Developing financial confidence starts with building your knowledge, then creating good habits to support your goals. Every woman can do this by first learning about the impact saving and investing can have on her future.

 

It’s never too early or too late to take control of your financial future. Financial confidence looks fabulous on every woman!

 

Sources:

Insured Retirement Institute, Women and Retirement, From Need to Opportunity: Engaging this Growing and Powerful Investor Segment

Soundinvesting.org, April 2006