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Women, Money, And Having It All

Mistakes Women Make Regarding Money
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Jennifer Thompson Money Coach
Photo by Sharon-McCutcheon, Unsplash

Women, money, and having it all. Society has told us, women, that we can’t have it all. But with a savvy money mindset and sound financial planning principles, we can certainly have it all!

As a woman, your financial needs change with age. How you manage your money should also change. Here is a list of things you need to be aware of as you age:

Your 20s — Creating Healthy Financial Habits

In your twenties, it is all about creating healthy financial habits. Much like learning to drive a car in your teens, you had to learn good driving habits and not pick up the habits of your parents! Money works the same way. Now that you are making your own money, learn all you can about using it wisely, investing it, and gaining confidence with it.

  • Establish your credit. And pay all your bills on time.
  • Open a savings account besides a checking account.
  • Pay yourself first — have at least 10% of your paycheck go to this savings account each time you get paid.
  • Build your emergency fund. This should amount to 3 to 6 months of your expenses.
  • Open an investment account with a Robo advisor, a discount brokerage, or a full-service brokerage. Do your research and interview a few advisors if you decide to have one. You should invest your savings once you’ve saved enough for your rainy-day fund.
  • Create a budget. Look at your last six months’ bank statements to see where your money goes. Create a realistic budget around it. Can you cut out unnecessary expenses? E.g., use public transport instead of driving to work.
  • Write down five financial goals — and have a timeline for each.
  • Save for the down payment on a home — if it is one of your goals — it’s a great asset to own.
  • Educate yourself on personal finance. Sign up for a financial literacy program or read up on personal finances.
  • Do you have enough life and disability insurance to protect your family from a loss of your income in case of your death or disability?
  • Time is on your side! Retirement may seem like a long way down the road but don’t forget about it.

Your 30s — Building Your Assets

This is the time to start building your assets; fixed assets such as a home, or investible assets such as stocks and bonds. Don’t wait till you’ve paid off your student loans. Don’t allow life events, such as the birth of a child, to stop you from adding to your assets.

  • Maintain good credit. Check your credit score annually.
  • Are you able to stick with your budget if you have one? Consider creating one if you don’t — you must know what’s coming in and what’s leaving.
  • If you have a partner, are you aware of where they are at? Are you able to talk openly about financial matters with them?
  • Create a plan as a couple. Discuss how you can help each other achieve your individual goals.
  • Have a written financial plan- with strategies on how you’d like to achieve your 3, 5, and 10-year goals. Annually review if you are on track to achieving those goals.
  • Pay yourself first- if you have not already begun, have at least 10% of your income directed towards a savings plan.
  • Build your emergency fund. This should amount to 3 to 6 months of your expenses.
  • Open an investment account with a Robo advisor, a discount brokerage, or a full-service brokerage. Research various platforms and interview a few advisors if you decide you’d like to go the advisor route.
  • Maximize your retirement savings — through work and outside of work. It will give you greater flexibility.
  • Save for your children’s education if you decide to have children.

Your 40s — Creating Wealth

Adding to your assets becomes increasingly important while managing debt and a large number of expenses. This is also the time when your career is taking off or you’re at the pinnacle. With having to juggle so many balls, you may be in a money fog – not clear about what’s coming in and what’s leaving. Unsure whether you’ve made the correct financial decisions.

  • Start paying down debt. Look over your budget and cut back if necessary. Shrink your debt.
  • Continue to maximize your retirement plans — at work and outside of work.
  • Continue to invest in a non-registered investment account. Invest in tax-favored vehicles such as dividend-paying stocks if it aligns with your tolerance for risk and objectives for your life.
  • Review your financial plan — have you achieved some of the goals you set in your 20s and 30s? What can you change to get you closer?
  • Create some new goals — 3, 5, 10 — years, and more. What would it look like for you to have it all?
  • Has your situation changed — through a divorce, remarriage, or inheritance?
  • Purchase a secondary property.
  • Consider working with an advisor — if you never have before. Your investment account may be large enough to want an advisor instead of managing your money alone.

Your 50s — Accelerating Asset Building & Dealing with Major Life Changes

Your children may be leaving the nest, your parents may be ready to go to a senior’s home if they are still alive. You’re sandwiched in between – taking care of going parents and launching kids. But don’t neglect your financial well-being, in the process.

  • Has your situation changed — through a divorce, remarriage, or inheritance? Have you adjusted your finances to reflect these changes?
  • Consider working with an advisor — if you never have before. Your investment account may be large enough to want an advisor instead of managing your money alone. They can also help you deal with life changes.
  • Create multiple income streams — e.g., rental income from a secondary property.
  • Maximize all contributions to your pension at work and non-registered accounts outside of work.
  • Review your retirement plan — are you on track? Are you aware of what’s available in terms of pensions?
  • Review your estate plan — essential if your family situation has changed.

Your 60s — Consolidating

This is a time of consolidating your finances. Your children are grown. With lesser responsibilities, the world is your oyster. You may choose to stay employed or choose the path of unretirement – return to work in a different field for greater fulfillment.

  • Review your retirement plan — are you on track to retire if you have not done so?
  • Do you know all your potential sources of retirement income? — public and employer pensions.
  • Have you considered unretirement? Are you thinking of returning to work in a different field or role?
  • Review your estate plan — essential if your family situation has changed.
  • Discuss with your children your plans for your future.
  • Create multiple income streams. E.g., rental income, a side hustle, dividend-paying stocks, and part-time work are some ideas.
  • Explore the possibility of retiring abroad — part-time or full-time.
  • Unfulfilled dreams? — Are there things you’d like to do on your bucket list?

Your 70s — Taking the future into your own hands.

  • Review your estate plan — essential if your family situation has changed. E.g. The death of your spouse, the birth of a new grandchild.
  • Are you financially prepared to be single? Through the death of a spouse or divorce later in life?
  • Discuss with your children your plans for your future.
  • Create multiple income streams. E.g., rental income, a side hustle, dividend-paying stocks, and part-time work are some ideas.
  • Explore the possibility of retiring abroad — part-time or full-time.
  • Unfulfilled dreams? — Are there things you’d like to do on your bucket list?
  • Is it time to downsize?
  • Work with an advisor.
  • Look at ways to minimize your taxes. E.g., gift some of your assets to minimize estate taxes. See your account for this.
  • Draw up a Living Will — to instruct whoever is left behind on the degree of medical intervention should you ever need it.
  • Look into long-term care facilities if you decide to take that direction.

Women and Money – Yes, You Can Have It All

Women have different needs from men. They live longer generally, are paid less than men, and have more time off work when raising their kids. But that does not mean they can’t have it all – a life that they desire.

Life is not static. A woman’s financial needs changes as she ages. I recognize that no two women are the same and have different needs. Not everyone wants kids, and not all women want a retirement plan.

But all women want autonomy, security, and freedom to choose their path. The list above provides general financial guidelines for women through their 20s, 30s, 40s, and beyond … so they can achieve the life they want because I believe everyone wants financial freedom.

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