Over time, your money can either make you or break you. If you allow your financial future to be dictated by external factors such as the economy, then you can never be sure of what lies ahead of you financially. In order to protect yourself and your family’s quality of life, then it’s important that you learn how to take conscious control of your financial future and financial planning before it’s too late.
A growing number of women are taking charge
They’re growing their own income streams, spending less, and saving more. In other words, they are consciously controlling their financial futures. Yet most financial planners continue to assume that clients need help with finances and tend not to focus on long-term planning or how investment returns will affect a client’s lifestyle when they reach retirement age.
While there are signs that advisors are starting to change, with some even working harder on developing solutions tailored specifically for women, most still don’t know how many female clients they have or where those clients fall along with key demographics like age, net worth, and income.
Advisors, who want to attract new female clients can start by asking themselves these questions: How much do I really understand about my female clients? Do I know what their financial goals are? Do I know what concerns they have about investing? And finally, if an advisor doesn’t already have any female clients, how can he or she find them in order to get started building a practice of women investors.
Financial literacy starts young
When we were young, most of us were taught that managing money meant going out and earning some. It wasn’t until later in life that we came to understand how much time, effort, and experience it takes to build financial wealth. Even though a lot can change in our 20s and 30s, there are still certain habits that can help us form good financial foundations early on.
The sooner you start developing them, the more successful your financial future will be. Here are three things every woman should do to prepare for her financial future. Take stock of your financial situation, Form healthy financial habits.
Let’s look at each one in detail. Take stock of your financial situation: Figure out where you stand financially by tracking all sources of income, including salary, bonuses, benefits, dividends, and interest earned from investments. Also, include any other regular income streams like alimony or child support payments. To get an accurate picture of what you have coming in each month, factor in irregular sources like gifts or inheritance as well.
Women face unique financial challenges
Typically women earn less than men, care for children, and manage household budgets. For a woman with these special concerns, taking charge of her financial future should be a priority. But it’s not always clear how to get started. Before creating any concrete plan (or investing in any training), you first need to understand what your priorities are as a woman saving or spending money.
Is financial security your biggest concern? If so, building a budget and figuring out how much you have leftover after paying monthly bills is essential—for making sure you have an emergency fund on hand at all times and for doing cost-benefit analyses on more expensive purchases.
Are you most concerned about achieving financial independence? In that case, reducing debt and improving credit scores will be key. Or maybe you just want to make sure you can retire someday? In that case, saving for retirement may be a top priority. Once you know where your financial priorities lie, there are plenty of tools available to help keep track of your progress toward those goals. If you want help becoming financially free, watch this documentary for women.
And even if you don’t feel confident enough yet to handle everything yourself, there’s no shame in seeking help from professionals who can provide advice based on your unique situation. The point is: whether it’s now or later in life, every woman needs to take control of her finances sooner rather than later—and once she does she’ll likely find that managing money isn’t nearly as complicated as she thought.
Women have fewer resources than men do when starting out
Less income, fewer personal savings, and less family support often result in more risky decisions about work and finances. But just because women are coming from behind doesn’t mean they need to lose. The first step towards securing your financial future is understanding your own mindset around money.
When it comes to spending, saving, and investing, what’s your attitude? Are you an impulse spender or a conservative saver? What’s your overall spending pattern? Do you have a habit of living within your means or can your income barely cover expenses? These questions will help you define what kind of consumer (or investor) you are and determine how much risk should be involved in achieving monetary goals.
Once you know yourself better, you can start making choices that align with your values. For example, if you’re someone who needs to see instant gratification before getting excited about a long-term goal, it might make sense to keep some cash on hand for spontaneous purchases—but put most of your resources into longer-term investments like retirement accounts or real estate. Also, if you worry about getting sick and not being able to work for a long time, an income protection insurance should keep you at ease.
If you’re someone who prefers slow and steady growth over wild fluctuations in value, consider putting most of your money into stable investments like bonds or mutual funds that mature over time. Once again: It all depends on where your priorities lie and how comfortable you are with taking risks.
The Best Time To Start Saving is Now
The earlier you start saving money, the easier it will be. A good habit is something you learn from an early age and that sticks with you throughout your life. If your parents taught you valuable lessons about thriftiness, chances are good that you’re already on your way to building healthy money habits.
They may not have meant to teach them specifically, but here are some things they might have said that actually carried a deeper meaning behind them. These little pieces of advice can help inspire you to save more: Save up for what you want instead of buying it right away or You can always make more money, but time spent is gone forever.
These aren’t just empty phrases—they’re reminders that one day those words could apply to your own children as well. Start teaching them how to save now so they don’t have to learn everything by trial and error later in life. Let them see you doing it yourself so they know it’s normal behavior.
Teach them how compound interest works, too—it’s an essential concept in personal finance. Showing kids how easy it is to earn interest on savings can motivate them even more than if you show off your fancy car or vacation home! It’s never too early (or late) to get started on becoming financially literate. It doesn’t matter if you’re young or old; everyone should try to keep learning about finances because there’s always room for improvement no matter where you are at in life.
