What All Women Should Know About Personal FinanceSubmitted by Washington Wealth Advisors | Falls Church and Ashburn, VA on May 10th, 2019
By Maura C. Schauss, CFP®
A few decades ago, it wasn’t uncommon for the husband in a relationship to be in complete control of the finances while the wife focused on other responsibilities to keep the family in order. So what would happen when the husband suddenly died or the marriage ended in divorce? The wife would often find herself struggling to get a grip on her new financial responsibilities. Fast forward to today. While challenges do exist, women can still reach all their financial goals. Here are a few topics ALL women should know about personal finance in order to succeed.
First, a little background for our discussion. Women make up almost 47% of the workforce. But, women still face financial challenges not often faced by men. Studies continue to show that women typically earn 85 cents of every dollar earned by men, and they usually spend fewer years in the workplace because they may take time off work to raise children. Because women generally live about 5 years longer than men, this means women have fewer years to save a higher percentage of their income, so they can fund their longer retirement.
The good news is, knowledge is empowering. You can still reach all the financial goals you have set for yourself, regardless of these setbacks, by understanding your personal situation.
To reach your financial goals, you need to track your spending. Even if you have a high net worth, you may be surprised at how much more you could save if you cut unnecessary purchases. It could equate to thousands of more dollars come retirement.
A recent study shows only 23% of women make the primary decisions about their family’s day-to-day finances. That number drops down to 18% when it comes to making decisions about longer-term retirement and investment planning.
If you’ve left budgeting up to your partner until now, set aside one night a week to learn the ropes. It could save you a lot of heartache and frustration down the road should something ever happen to your spouse or your marriage.
Once your budget is solid, start finding ways to save more money. There are typically two ways to do this: decrease spending or increase income. The most effective way is to do a combination of both.
Small everyday purchases add up to a large amount of money over time. Think about ways you can decrease spending without depriving yourself. Could you make your own coffee throughout the week instead of grabbing a cup on your way into the office? If you want to increase income, could you ask for a raise at your current job, rent out your spare bedroom, or sell some of the items that have been accumulating in your home?
Whatever you do, make sure you take advantage of your retirement plan. Whether it’s an employer-sponsored plan or a personal plan, contribute as much as you can. You’ll thank yourself later.
Investing is a great way for women to close the gender pay gap and save extra money for retirement. Did you know women typically have a 0.4% higher return on investments than men? It’s true. But women are also more likely to keep their money in a low-risk savings account than in investments because their earned dollars are more precious to them. Breaking this cycle and having a strong investment portfolio gets you one step closer to reaching your financial goals—and living your dream life in retirement.
Given the right tools and education, women can succeed in reaching every financial goal they set for themselves. It may be overwhelming at first, but the more you know about investing, and the more you do it, the easier it becomes. The best way to gain momentum in reaching your financial goals is by seeking help from a professional.
At Washington Wealth Advisors, we can help you build an investment portfolio that works for you. Want to talk? Schedule a meeting with Maura, call our office at 703.584.2700, or email email@example.com. We are here to support your journey towards financial peace of mind.
Washington Wealth Advisors is an independent registered investment advisory firm serving high net worth families and small businesses. We focus on holistic financial planning and comprehensive investment management. Leveraging our core strengths of unbiased, active investment management together with a detailed annual financial planning capability, we serve your comprehensive investment and financial planning needs.
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Washington Wealth Advisors, LLC), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Washington Wealth Advisors, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Washington Wealth Advisors, LLC is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Washington Wealth Advisors, LLC’s current written disclosure statement discussing our advisory services and fees is available for review upon request. Please Note: Washington Wealth Advisors, LLC does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Washington Wealth Advisors, LLC’s web site or incorporated herein, and takes no responsibility therefore. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.