Take Control of Your Money
Women are now rocking it in the corporate world and as business owners. We have become very good at making money, but most of us were not given the tools and/or resources in terms of making our money work as hard for us as we did for it. In my practice, I encounter women that spend $1,000 or more on a purse and still have outstanding student loans of $100,000 or more. They are driving a Mercedes and living in an apartment. They are living like Oprah and paying $500+ for shoes with a red sole, but live from check to check. Well as Oprah says, “When you know better, you do better”!
Below are some tips to help you learn to live without financial stress. The steps are pretty simple, and if you will follow them, you will probably be the only one in your group of friends and associates that is not worried about money. I try to break it down into simple steps, per age groups and circumstances. The earlier you start, the better your position will be as you approach retirement. The main thing is to get started right where you are. I recommend that you meet with a Financial Planner to get a big picture view of your yesterday, today, and tomorrow plans to put together a financial roadmap. This will save you lots of headaches later on because most of my clients are in the late 40’s and 50’s when they get referred to me, and they are playing catch up because they did not have a solid foundation early on.
The goal is to have multiple buckets to draw from when you get ready to retire. Between your Roth and/or Traditional IRA, pension, retirement plans from work, Social Security, rental properties, etc., retirement should be an adventure. One thing I can’t stress enough: Everyone needs life insurance outside of work. If you leave that job or it leaves you, that life insurance typically stays there. The younger you are, the cheaper it is.
Women in their 20’s and 30’s
You have nothing to hold you back at this point in your life. Do the opposite of what your friends are doing. Establish a “delayed gratification” way of thinking early and you will far exceed your friends that are spending as fast as they make it. Don’t live beyond your means; RAISE YOUR MEANS!
- Start saving 20% of your income. Always think for the future! You’re it for now with no fall back plan.
- Put those savings to good use by investing in growth assets.
- If your employer offers some type of retirement plan, participate in it. If they match your contributions, have them take at least that percentage toward your retirement. Free money baby!
- Establish an emergency fund worth 6 months of your monthly expenses.
- If you qualify for one, fund a Roth IRA every year.
- Establish a budget and allow yourself occasional indulgences. Delayed gratification will paint a bright picture for your future.
- Avoid credit card debt and try to never charge more than you can afford to pay off at the end of the month.
- Pay off your student loans ASAP.
- Meet with a Financial Planner to establish a financial roadmap that will help you target and stay focused on your goals.
- Buy some permanent life insurance that suits your needs. It’s cheap now and you are healthier than you will ever be. You will thank me later!
Women in their 40’s and 50’s
- Revisit your financial roadmap with your Financial Planner to ensure that your plan is keeping up with your ever-changing life. Make adjustments where necessary.
- You may have children and significant other by now. Check your beneficiary designations to make sure they are up-to-date.
- Make sure you have credit and credit cards in your name because it is important that your individual credit is good.
- Ensure that your name is on the bank accounts. It is also good to have at least a savings that is just yours. You can have a special savings/checking account that you use to buy gifts or special items to surprise your significant other.
- Increase your participation in your company’s 401(k) or whatever retirement plan they offer. You are on a mission, so don’t lose focus!
- Take a look at your debts and start knocking them out. You want to start looking toward retirement and you don’t want a heavy debt load.
- You may be part of the “sandwich generation” (taking care of parents and children). Take a look at Long Term Care insurance for yourself and/or significant other. Don’t wait too long because the price increases as you age. I call LTC insurance “Options”!
- Make sure you have established a will and/or trust to protect your stuff and people. Get a referral from your Financial Planner.
Women in their 60’s and Beyond
- It’s time to dial it back in terms of the aggressiveness of your investments. You can’t afford to take big losses if the market goes down. You need guarantees at this point.
- Meet with your Financial Planner to make sure that you are on target for retirement.
- Revisit your Social Security statement.
- Make a plan for what retirement looks like to you. Many people retire and become bored or depressed within a few weeks. Create a new roadmap for retirement.
- Check to make sure that all of your estate plan documents are up-to-date.
- Get ready to live the La Vida Loca life.