By Lindsey Simek, Financial Advisor
When it comes to us women, there are several reasons why money and finances may take a back seat to our everyday responsibilities. It’s not that we can’t plan for our financial future, we can, we are just so busy. We work, take care of kids, relatives, manage the household, and tackle several other daily demands. We have very little, if any, extra time on our hands. Therefore, understanding the necessary elements of our financial future, unfortunately, can be shoved to the bottom of our priority list. However, women can’t ignore the issue. According to Lorna Sabbia, head of Retirement and Personal Wealth Solutions at Bank of America, “There’s a huge wealth gap between men and women, caused by such things as the pay gap and the fact that women tend to spend more time out of the workforce caring for family. Our saving and investing are impacted by these things, which makes it all the more important for us to take control of our finances early on.” Women must plan for and invest in their financial future, no matter what their circumstances.
Many women seem to be on autopilot, unaware of the many life events that might disrupt and, in some cases, undo their financial security. For wives, many may already have retirement accounts set up, money is transferred every month and no more thought is given to it. However, these accounts need to be paid attention to, monitored, and we as women must make sure that it is not only getting done, but there is an understanding as to how it is getting done. Many of us don’t even have retirement accounts in our own names, but maybe our partners have great retirement plans, so we really have no need to worry about it, right? No, not right. This is where it can go wrong in so many instances. What if there is an emergency or even worse, a death in the family. Do we have an emergency fund set up? Do we have cash set aside if suddenly there isn’t an income coming in? Or what if there is a major disruption in the family, a child gets very sick, and you can’t work, or you need extra income to care for his or her needs? Or what if after years together, a marriage falls apart and financial independence becomes a necessity.
I was one of those women. I worked, I didn’t save, and I spent a lot. I didn’t give it another thought. I had a perfect family, a beautiful home, and my husband had our retirement taken care of, more than taken care of, we were on the perfect path. Our youngest would graduate before either of us turned 45, and we were going to travel and enjoy life while we were still young. I was clueless about our finances. Not only was I clueless, but I also had no desire to know anything about our investments or be involved in any way. That was up to him and his money managers, I wasn’t even allowed to know what was going on and sadly I was fine with that. I had my job, I spent my money, I had a perfect family, and then one day I didn’t anymore. In a matter of one month my house was sold, my car was gone and my four kids and I, yes four kids, were living in an apartment. I had nothing in savings, no rainy-day fund. I hadn’t saved. I carelessly spent. I did everything wrong. And I did it to myself. I’m an educated, smart woman, but I believed that I was taken care of, and my financial future was not my responsibility and that was the most careless thing I had ever done. I acknowledge that in many instances wives get half of the retirement, however in my situation that wasn’t the case, and many women will also find themselves in this position.
I have begun to repave my road to my own financial independence. I have my own retirement account, building my savings every day and making sure I will never be in the position I was years ago. I can’t retire in five years, but that’s okay. I have new goals and objectives and have made major changes in my life. I am here to offer help, share my narrative, and I truly hope that I will inspire women to take charge of or be contributing partners in their financial futures, not only inspire them, but be a part of their story, by aiding them and guiding them through the journey.
So, as women, where do we start? Well according to CNBC, the first thing is to build confidence so you can begin to take control of your personal finances. Women need to develop a basic understanding of savings and investments. This can be done by reading investment articles, attending financial planning webinars and seminars, and creating a plan that maps out your financial situation and personal goals. Finally, you need to understand how to make your money work. While many women typically have lower risk tolerance, it is important to make sure they are in a well-managed portfolio, based on their goals and tolerance level.
Financial independence isn’t going to happen overnight. However, I encourage all women out there, if you have not taken an active part in your finances to do so now. Educate yourselves, strategize, and then execute the plan. By gaining knowledge and becoming active in your everyday finances, doesn’t mean that something terrible is going to happen or even that we are expecting it. It doesn’t mean that women who have some sort of financial independence are preparing for some type of doom. It just means we are educating ourselves. It is time to close that gap between men and women, enjoy the good times, but prepare for the bad times. This could be divorce, sickness, or death. This could mean an even more lucrative retirement with two contributing partners. Many different situations, all the same preparations.