Do you ever ask yourself if you’re enough? I know I do, of myself.
Are we enough at work, with families and friends, or as caregivers to those we love? Are we investing enough in our careers, relationships, ourselves? Do we have enough saved for the future? The questions go on and on.
Although women are increasingly questioning their futures — and taking control of their finances — we’re still asking ourselves if we’re enough. If it’s enough. Will we have enough to take care of ourselves when we’re 60? When we’re 80? The numbers tell us so.
• 55 percent of women are overwhelmed when it comes to their finances
• 48 percent are embarrassed they don’t know more about investing
• 31 percent regret not saving enough for retirement
It can all be a little daunting, especially given how women are known to live longer yet earn less than their male counterparts. The good news is that women, though they question, aren’t stuck in a sea of uncertainty. We’re jumping in and taking control of our finances.
Ninety-four percent of women surveyed in a study by HerMoney and the Alliance for Lifetime Income said they helped manage their household finances, investments, and retirement planning. Despite inflation and other economic issues that cause us to question, 92 percent of women say they plan to maintain or increase their retirement account contributions.
Whether you’re single and loving it, running a household, or managing a corporation, here are some tips to help you stay the course.
For Young Women
Decide that you rule the money. It doesn’t rule you. Be proactive and set monthly budgets so you can save, set up an emergency fund, and start investing in your future (read: retirement planning).
By the way, it’s never too early to begin retirement planning. Consider this scenario: You’re 25, working at a full-time job with benefits, including a retirement savings plan. You begin investing $3,600 a year in the S&P 500. You stay at just that amount (you don’t up it despite future raises, promotions, or job changes) for 20 years. At the end of those 20 years, the total investment of $72,000 would be worth about $180,000.
For Single Women
Avoid tapping into your retirement accounts. Fight the urge to tap into retirement accounts for an infusion of cash to buy a car or pay off debt, for example. Of the nearly half (49 percent) of investors under the age of 34 who said they have withdrawn from an IRA or 401(k) early, 20 percent said it was to pay for education, followed closely by a medical emergency (19 percent) and other reasons, according to Advisor Magazine. Early withdrawals from retirement accounts may trigger penalties and taxes, among other disadvantages.
Save for a rainy day or days. Some suggest a six- to nine-month savings pot; others recommend 12 to 18 months. While more is always better when it comes to savings, the goal here is to do what you can with what you have. Even if it’s $100 a month, you’ll soon start to see a cushion grow, which will provide a soft landing if ever you find yourself without steady, reliable income.
For the Leading (Boss) Ladies
Create a goal-based financial plan. Women tend to be more goal-oriented when investing and building wealth — a great strength. When financial goals are defined and mean something personally, we’re motivated to reach our financial goals.
Bring in an advisory team to be your right-hand man, er, woman with your finances. As your net worth increases, so does your need for more professional advice. Working with a trusted team ensures that your holistic financial vision and endgame (goals) stay on track and become reality.
Lindsey D. Rhea, CFP, is owner and wealth strategist at Alia Wealth Partners, connect@aliawealth.com.
