What All Women Should Know About Personal Finance
By Preston Rosamond
It wasn’t that long ago, just a few decades, when it was common practice for the husband to be in complete control of the finances while the wife’s sole focus was on taking care of the children and the home. It was also common that, if the husband were to suddenly die or the marriage ended in divorce, the wife often found herself struggling to get a grip on her new financial responsibilities.
Fast-forward to today’s era where women make up almost 47% of the workforce. (1) But women still face financial challenges not often faced by men. Women typically earn 85 cents of every dollar earned by men, (2) 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.
Doesn’t seem fair, right?
The good news is, you can still reach all the financial goals you have set for yourself, regardless of these setbacks. Here are a few topics all women should know about personal finance in order to succeed.
Know Where Your Money Is Going
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 when you reach 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. (3)
If you’ve left budgeting up to your spouse 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.
Find More Ways To Save
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 start a side hustle?
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—especially if you’re near retirement. You’ll thank yourself later.
Don’t Be Afraid To Invest
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? (4) 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.
Seek Help From A Professional
By now it’s no secret that given the right tools and education, women can succeed in reaching every financial goal they set for themselves. Sometimes it can be overwhelming, especially 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.
Preston Rosamond is a financial advisor and the founder of The Rosamond Financial Group Wealth Management, LLC with nearly two decades of industry experience. He provides comprehensive wealth management and financial services to individuals, professionals, and families who enjoy simplicity and seek a professional to help them pursue their goals. Preston personally serves his clients with an individual touch and a sincere heart, and his servant’s attitude is evident from the moment you meet him. Learn more about Preston or start the conversation about your finances with him by emailing email@example.com or schedule a call with our online calendar.