As women’s roles expand in our workforce, our communities, and our family networks, so too do their responsibilities. Women are increasingly independent, personally and financially, often supporting both themselves and other family members. Yet gender-specific issues like lower earnings and longer lifespans continue to challenge longer-term financial security. What better way to celebrate Women’s Self Empowerment Week, therefore, than by considering women’s financial well-being?
As a top-ranked, woman-owned personal wealth manager, SageVest Wealth Management understands the importance of financial planning for women. Here are five essential money tips that every woman should follow.
Don’t Be A Silent Or Absent Financial Partner
If you’re in a relationship, be financially present too. Financial complacency puts you, and potentially your loved ones, at risk. You might even be placing additional strain on your relationship by burdening your partner with all the financial decision-making. Staying involved avoids:
- Being out of touch with your financial standing.
- Not knowing if you’re prepared and/or on track for longer-term life objectives.
- Struggling to manage the finances in a crisis.
- Becoming financially vulnerable in a marriage.
Review And Understand Your Tax Return, Don’t Just Sign It
Simply signing a tax return (or any document) is one of the most common financial mistakes women make. Your return is a useful document for monitoring your income and your assets. It might seem intimidating, but two easy things to look for are:
How Much Did Your Family Earn? (Form 1040)
Your adjusted gross income gives you a sense of your household income. Ask yourself if you’re making wise spending and saving decisions, relative to this figure.
What Investments Do You Own? (Schedules B, D & E)
Be aware of the assets you own, which are typically identified on Schedules B, D and E. If an account or entity is listed, you should know how it’s titled and its value. Ideally, you also should be aware of retirement assets e.g., IRAs and 401(k)s that might not appear on the tax return.
Be Cognizant Of Your Personal Financial Security
While women’s income equality is improving, including more female bread-winning households, women are often still the lower household earners. This might be the result of being a stay-at-home mom, working part-time to raise a family, or caring for other relatives. Whatever your earning potential, make sure you’re financially protected:
Have Assets In Your Own Name
Joint ownership can help to encourage financial involvement, but it can also leave you at risk in the event of divorce. Make sure some assets are in your name for greater individual security.
Make Contributions To A Retirement Savings Account
Always contribute to your retirement plan, ideally maximizing your contributions. Even if you don’t work, you might still be able to contribute to an IRA, depending upon household income.
Protect Yourself With Adequate Life & Disability Insurance
If you rely upon a partner to support some or all of the household expenses, life and disability insurance will protect you and your loved ones in the event of their disability or death. Likewise, ensure that you too have adequate individual coverage.
Assess If You Could Qualify For A Loan
If you have loans like a mortgage, or may need one in the future, make sure you could qualify independently in the event of a death, disability or divorce.
Maintain Your Skill Set
If you’ve taken time off to care for children or family members, keep your skill set current. This can help ease a potential return to work in the future.
Consider Loss Of Benefits If You Remarry
If you’ve lost a spouse through death or divorce, carefully evaluate benefits you might lose in the event you remarry e.g., pensions, Social Security, or alimony.
Consider Your Potential Life Longevity As A Woman
As a woman, you’re likely to enjoy a longer lifespan than your male counterparts. You’re also more likely to be single at some point in your life, but especially in later years. Being alone as you age requires financial and emotional security, and ongoing participation in your finances. Additional considerations include:
Amass Adequate Assets To Sustain Longevity
The financial decisions you make should allow you to enjoy today, as well as prepare for tomorrow.
Explore Long Term Care Insurance
Protect yourself against the greatest cost in retirement: the potential for a long-term care need.
Nurture A Strong Support System
Ensure you have a group of family members, friends and/or professionals to assist and support you as you age.
Don’t Be Too Conservative Or Too Generous With Your Money
Women tend to be more conservative when it comes to investing, and they often focus more on what money can do to help others versus themselves. Make sure you’re not missing out on investment opportunities by being overly conservative e.g., by only investing in CDs or annuities. Furthermore, be cognizant of your own financial needs, relative to those of your family and/or charitable interests.
SageVest Wealth Management is a female-owned financial advisory and investment management firm, consistently ranked as a Top Fee-Only Advisor in VA, MD and DC by Washingtonian Magazine, Northern Virginia Magazine, and Five Star Wealth Professionals. We work with individuals, couples and families, encouraging sound financial decisions that support your individual and shared objectives. We also place a firm emphasis on children’s financial education through our sister site, SageVest Kids. Our fee-only, fiduciary structure ensures that our advice is always unbiased and always focused on your best interests. Please contact us to learn how we can help you become financially empowered.