Wealth Building For Women: Part 2
Here are ten steps that will help you take control of your financial future:
1. Let knowledge overcome fear. Knowledge is empowerment! The more you learn about money and investing, the more confident and successful you will become at managing it. Start by attending for-women-only seminars on finances, reading investment books, studying investment concepts, and attending adult education mini-courses.
2. Manage your cash. Get your income and expenses in balance by setting up a workable household budget. Also, put away the credit cards. This will put you in control of your spending and help you identify money you can save for the future.
3. Find good advisors and work in partnership with them. Nobody has to go it alone. There are professionals who can provide information, insight and recommendations to help you identify and achieve your objectives. The key is objectivity. Find someone who is knowledgeable and with whom you are comfortable. Look for someone who advises and helps to guide your decisions. Remember, it’s your money, so final decisions are up to you.
4. Establish goals. Goals are blueprints of your vision of the future (e.g. sipping coffee on your beachfront veranda at age 65; watching your children or grandchildren graduate from college debt-free; a trip to Europe paid for by the golden eggs from your retirement “golden goose,” etc.) To achieve these goals, you’ll want to start saving early, and save as long as you can. Keep your own savings and retirement accounts, even if you are married. For joint accounts take an active and equal interest in the account. Once you know what you want, you can plan what it will take to achieve your goals. A good advisor will work with you to help you quantify your goals and develop a strategy to help achieve them.
5. Identify your “risk tolerance.” This is your comfort zone for investing. It can range from ultra-conservative (you like savings accounts and GICs) to highly aggressive (penny stocks and high-risk investments). Avoid investments that make you ill at ease. If your investments keep you awake at night, your money is in the wrong place. Work with your advisor to determine your current risk profile.
6. If you are working with an advisor, do not abdicate financial responsibility. Make building wealth something you do together. If you are married remember, “there are no guarantees. Your husband could die or leave. Get involved.”
7. Don’t shy away from tough choices. Sacrifices you make today can help pay for a solid standard of living tomorrow. Allocate at least 10% of your income for the future. Pay yourself first. When you write cheques to pay your monthly bills, also write a cheque to your chosen investment account.
8. Take your time. Invest a little at a time to get your feet wet. This creates experience and confidence.
9. Protect your value with disability and life insurance. If you died, what would be the impact on your loved ones? Whether you are a homemaker or your household’s sole support, your death or disability could have a tremendous financial impact on your family. Protect that value with insurance.
10. Pass it on. If you have a daughter, educate her about money, so the next generation can avoid the frustrations you may be experiencing.
Many men and women find money management boring. Learning about it and then practicing what you learn can take discipline. However, the knowledge you gain and apply is one of those must do things that is well worth the investment in time. Just do it. You’ll be glad you did.
Contact my office to begin the process of getting comfortable with and in control of your financial situation.
Also, visit myfinancialsolutions.ca for additional financial information on insurance, retirement, estate planning, investments and whole host of other financial topics.
