Women and Wealth

Women and Wealth

Women today are responsible for their own financial well-being, so it is important that women know how to save, invest, and plan for their future.   

However, women often face unique planning challenges:

  • Women generally earn less income and have less savings,
  • Women have longer life expectancies,
  • Women are more likely to take career breaks for care giving, and
  • Women often invest too conservatively.

 

Here are some of the things women can do to take responsibility for their financial future:

1. Take control of your money.

  • Know what your cash flow is. Establish a positive cash flow by budgeting, managing debt wisely, and living within your means. 
  • Create an emergency fund so that you'll have money readily available to meet unexpected expenses.
  • Establish and maintain good credit because your credit score will determine the interest rate you receive when you borrow money.
  • Set clear financial goals.

2. Become a more knowledgeable investor.   

Many women will end up being solely responsible for their own financial well-being at some point in their lives, so it is important that they have a sound understanding of the investment world and the confidence to make appropriate investing decisions. No matter what your level of expertise, there is always room to learn more and adjust your plan based on your current circumstances.

3. Plan for retirement.   

Don't postpone getting started. The longer you wait, the fewer options you may have.  Start saving now by contributing into an IRA, Roth IRA or retirement plan at work.  It is important to get in the habit of saving as much as you can, no matter what.    Even if you're staying at home to raise your family, you can and should save for retirement.  Set a savings goal that you can work toward and keep track of your progress.    Monitor your investments and make changes as needed.  A financial professional can help you here.

4. Protect your income and assets.   

Insurance transfers the risk from you and your family to an insurance company. Here are the types of insurance you should consider. 

Life insurance can provide proceeds that can be used to replace your lost income or the value of services you perform at home. Think about it. If you should die prematurely, would your family be able to maintain the same lifestyle that they have now?

Disability insurance protects your income if you are unable to work for an extended period of time. Becoming disabled is a far greater risk than people think. A typical policy will replace 50% to 70% of your income.

Home and auto insurance. Along with protecting your property from damage, both home and auto insurance cover you for liability claims that result from accidents and injuries caused by you.   If you have significant assets, you should consider umbrella liability insurance, which provides an extra layer of liability coverage above and beyond that provided by your home and auto insurance.

Long-term care insurance.  As we age, our need for long-term care increases. Long-term care insurance pays a certain dollar amount per day, for a set period of time, for the type of long-term care described in the policy. Depending on the benefits selected, care can be provided in a variety of settings, such as your home, assisted-living facilities, and nursing homes. The best time to purchase long-term care insurance is when you are healthy enough to qualify for it.

5. Create an estate plan.    

An estate plan is simply a map that reflects the way you want your personal and financial affairs to be handled in case of your incapacity or death.    It allows you to control what happens to you and your property. Do you want to leave a legacy for your children or grandchildren? Do you want to donate a portion of your estate to charity?  Have you thought about what type of medical intervention you would want after an accident in the event you couldn't speak for yourself?

By putting an estate plan in place now while you still have the mental capacity to do so, not only will you have a say in what happens to you and your property, but you'll also make it easier for your loved ones to cope if something unexpected should happen to you, because your family members will know your express wishes.

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