In my practice I meet a lot of women. It amazes me how many times these women, who come from a variety of educational and economic backgrounds, tell me they just aren’t smart when it comes to money.
A lot of married women leave financial matters to their husbands to handle. Some single women leave their retirement up to fate. If you don’t know how to manage money now, that doesn’t mean you can’t learn. Here are some mistakes I’d like you to avoid:
1. Not Knowing Where Your Money Goes: The availability of credit has enabled all of us to spend money we don’t have, which can become a bad habit. Track every dime you spend for 30 days. Add up the categories (gas, meals out, etc) and look at where your money is going. What do you need to change so you can save more, and pay off debt faster?
2. Not Saving for Retirement: Women today earn about 77 cents for every dollar a man earns, and much of this is due to women spending time out of the workforce to raise children and care for aging parents. The result is that most women have not saved enough in their retirement plans. You will want to have money when you retire. What can you give up today so you can have what you want tomorrow?
3. Letting Your Husband Handle Everything: I’ve met many widows who did this, and when their husbands died unexpectedly they were completely unaware of their financial position. Would they have enough money to pay their bills and maintain their lifestyle? Were they going to run out of money? Know and understand your household finances: income, expenses, assets, debts, insurance policies (and who the beneficiaries are!). Next, go on all the appointments with your husband when he visits with your Financial Advisor, CPA, and Attorney. Read everything and ask questions.
4. Opting Out of Survivor Benefits: If you are married, and your spouse will have a pension, they will have options upon retirement as to how to take this money. One option is income for their lifetime only, and another option is income for your lifetime as well (if they die first). The second option provides less monthly income, but provides income for both of your lives. For some reason, people don’t think they’re going to die any time soon, and choose the first option. Then they die, and their spouse doesn’t have this income stream. I see this too frequently and it is heartbreaking.
5. Ignoring Longevity: Women are living about seven years longer than men, and a woman who is 65 today can expect to live to age 85. Living longer means needing income that will keep up with inflation, and possibly pay Long Term Care expenses.
This article is just the beginning. I encourage you to find professionals who will work with you, help you take a look at where you are, then help you build a secure financial future.
Sherri Goss, CFP® is Senior VP at Rosenberg Financial Group, Inc. You can reach Sherri by phone at 478-922-8100 or by email