Both men and women need to plan their finances at some point. They need to prioritize their goals, analyze investment portfolio, and understand the importance of savings to have a successful financial life. Though the basics of financial planning are same for everyone, yet women face lots of socio-economic issues that demand special consideration. Some of the most common issues are:
- Women live longer than men
- Men earn more than women
- Women have to maintain household budget
- Most times, adult children approach women for financial assistance
- They are the ones who have to take care of spouses and old parents
The issues are common and very important. Most women have to face these challenges at various stages of life. This is why they need to create and follow some special rules to address those challenges.
1. Work and save for the golden years of your life
Nothing is guaranteed in life. So, you need to save for your retirement years. Remember, since you're a woman, you've to save more in comparison to men. This is because women tend to live more than men.
A lot of women make a blunder by taking Social Security before their retirement age. Never make that mistake. It would cut down your Social Security benefits by around 30%.
2. Decide what is more important before creating a to-do list
A woman's mind is like running 280,000 applications at the same time. It is thinking about 1000 things at the same time. As a woman, you need to prioritize your goals. You've to decide what is more important for you - saving for kids' financial future or retiring comfortably.
3. Have a basic understanding before you invest
Women have lots of basic building blocks when it comes to investment. Unlike men, they're not much interested in understanding performance histories, market volatility, expense ratios, etc. All that matters to them is the ultimate goal - profit. Perhaps, this is why only 13% of women are fully confident and 50% are somewhat confident about their investment decisions.
Lack of knowledge will create confusions. Good education and a clear explanation of the investment process can help you invest properly and achieve personal goals.
4. Approach a financial planner with whom you're comfortable
Right planner can help you strike a balance in your financial life. He/she can help you complete the tasks you noted down in your to-do list. However, he can't work single handedly. He needs your co-operation and for that you've to discuss everything frankly with him.
Gender should not be an issue in this case. A lot of women have no faith on the female financial planners. On the other hand, gender of the planner is a very big factor for the 25% of the widowed and divorced women. However, 90% of single and married women don't bother about the gender of the planner.
5. Realize your potential and take advantage of all benefits
Are you too worried about a potential layoff? Instead of spending sleepless nights and thinking what to do next, create a financial cushion right now. And you can do that by utilizing all benefit plans offered by your present employer. Talk with a financial planner regarding your career to know if you're on the right track. Don't hesitate to ask for a pay hike when employers ask you to shoulder extra responsibilities. Other than that, look for new job offers and check out the benefit packages.Last impressions
Finally, check out your partner's retirement plan since he may not have your best interest in his mind. For instance, he may think it is alright to withdraw pensions early in exchange for low survivors benefit. This means you'll only receive 40% of pension instead of the total 100 percent. If you're only dependent upon your spouse's pension, then it'll simply be a big mess.
