Laura Webb Article published in the November 2018 issue of WNC Woman
I can’t tell you how many times I’ve seen a woman come into my office and ask for some help. Here’s the typical profile. She comes from a successful family. Her husband has a great job, and they own a very nice house. She’s raised two children, hasn’t worked in years and participates in several non-profits in the community. She’s in her mid-fifties. From the outside, everything in the marriage looked great … until it wasn’t. And now, she’s newly divorced.
In our discovery process to begin her planning, she tells me all she walked away from the marriage with was a small amount of cash and a portion of his 401(k) plan.
All I can think about was where did all the money go? The house had been sold. She was renting a small apartment and having to find a job for the first time in 20 years. When I asked what happened, all she could say was that they never really talked about money and she never asked.
This might seem an extreme example, but it’s not.
Even today, not enough women … single, married, widowed or divorced … are actively participating in their own long-term financial management.
It’s true that more and more women are their household’s primary breadwinners or are enjoying greater earning power than their spouse or partner. And more women are the bill payers and see themselves as the chief financial officers or at least have a great deal of responsibility for major financial decisions within their households. Good thing. By 2030, two-thirds of the United States’ wealth will be in the hands of women, and 80% of women will assume financial control of their money at some point in their lives (1).
But women still have significant financial challenges to overcome. They earn less, save less, invest less, pay more for their debt, and live longer.
If you’re not already in charge of your finances, it’s highly likely you will be at some point in your life, so acting now will help you avoid the 2nd biggest mistake women make … not taking an active role in your own financial health. Not paying attention. Deferring to someone else. Procrastinating.
Most of the barriers to taking control are related to lack of time and lack of confidence.
Women typically put their family’s needs in front of their own. Working, looking after children, managing the household, and taking care of parents represent serious drains on your time. It seems there‘s not even enough time to take care of yourself, let alone manage your money, but the cost of neglect can be high … with serious consequences down the line.
Lack of confidence is as big of an issue as time. The majority of women hold back when talking about money because it makes them uncomfortable or even embarrassed by their lack of knowledge. Studies show that while 77% of women are confident discussing medical issues with a doctor on their own, only 47% would be comfortable talking about money and investing with a financial professional (2).
So, how do you start to take control of your finances?
Do at least one of these things:
- Develop a spending plan or a budget. Are you spending more than you make? Are you saving enough? Knowing where you stand gives you the power to make adjustments along the way.
- Create a Family Financial Statement. List your assets, both joint and individual … including retirement account balances, Real Estate, and other real property. Then list any debts … including mortgages, cars loans, and credit cards, and update the two lists periodically. This will let you know how well you are doing and give you a baseline against which to measure your progress.
- Schedule a PLANNING WEEKEND once a year to discuss the goals you have for your family, for yourself personally and professionally, and especially your financial goals.
- Plan a Financial Date Night, a time when you can talk about where you are, what adjustments you need to make, and if you‘re even on the same page.
- Read your tax return and ask questions before signing it. Tax returns offer a tremendous amount of information regarding your financial health.
- Seek third party guidance to help you map out a plan and measure the progress you’re making towards your long-term financial goals.
Many of those steps may seem intimidating if you and your partner haven’t focused on them before. But imagine how it might feel to think you’re okay financially only to find out that you’ve been spending too much, have racked up too much debt, haven’t saved enough for retirement, or have made poor investment decisions. It can be like the rug has been pulled out from under you. Taking any of these steps will put you on firmer ground. And the more you take the better.
This is all about Empowerment.
Empowerment = Confidence.
And Confidence = the Power to take control of your financial future, instead of it having power over you.
Next time … the 3rd biggest mistake women make.
Laura Webb CFP® is founder of Webb Investment Services, a locally owned, wealth management and investment consulting practice and a Certified Financial Transitionist®. 82 Patton Ave, Suite 610, Asheville, NC 28801, 828-252-5132. www.laurawebb.com Securities offered through Raymond James Financial Services, Inc. member FINRA/SIPC Webb Investment Services is independent of Raymond James Financial Services, Inc. and is not a registered broker/dealer. Investment advisory services are offered through Raymond James Financial Services Advisors. CFP Board owns the CFP® marks in the United States. Any opinions are those of Laura A Webb and not necessarily those of RJFS or Raymond James. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.