Modern-day women who are the primary breadwinners face an increased level of financial responsibility. While many strive to take ownership of their familyâs financial situation and take measures to accumulate a nest egg that will support them and their spouses in the future, most are just not sure where to begin.
Regardless of their background, age or experiences, most of these highly motivated women struggle with the same concerns: Will I need to change my lifestyle? How do I know I wonât run out of money? Will I be capable of staying on top of my finances?
As women continue to control greater amounts of wealth, they must feel comfortable managing their assets. Here are five ways working women can better manage their money:
1. Familiarize yourself with all family financial matters
Many couples divide up financial responsibilities such as paying bills and making loan payments. While dividing up these tasks is a good way to manage the responsibilities, being in the dark about what your partner is doing or handling can be detrimental to your overall financial health, and may cause a great deal of confusion about the state of your familyâs finances. Even if you donât handle all financial decisions made in your family, itâs important to stay âin the knowâ by maintaining an open dialogue with each other.
Staying on the same page could be as simple as keeping a close record of when all bills must be paid, informing each other of any salary changes or talking through major purchases like a car or a new home.
2. Put your needs first
Thereâs a reason why flight attendants instruct you to put on your oxygen mask before assisting others. You need to help yourself to properly help others. The same is true for financial matters. Many women spend much of their time working, raising children and/or caring for aging parents, often putting their own needs on the back burner.
One of those needs most often compromised is saving for retirement â this is a necessity and should not be delayed. Based on the average life expectancy for women, which today is 86.6 according to the Social Security Administration, itâs best to plan to accumulate enough funds to last for at least 20 years after retiring. Company pensions are nearly extinct, and personal retirement savings will likely be the leading source of retirement income. Also, according to the Department of Labor, in 2015 only 44% of women were invested in a retirement plan.
Knowing youâre on track to reach long-term goals like retirement will give you the confidence to handle short-term issues that may need to be addressed with your family.
3. Step outside of your comfort zone
A crucial part of a solid investment strategy is identifying the amount of risk you are comfortable with, and periodically checking in on that preference to make sure the investments in your portfolio are in alignment.
While no investment should keep you up at night, you may wish to consider investments that carry slightly more risk than you would normally be comfortable with. Investing in growth-oriented investments such as stocks or stock mutual funds is a necessary component to stay ahead of inflation.
Taking on extra risk â which brings with it the potential for a higher return â may allow you to start growing your nest egg at a rate that will allow you to retire comfortably.
4. Focus on improving your financial knowledge
Thereâs a high possibility that as a woman, you will be financially âself-reliantâ at some point in your life due to divorce, widowhood, choosing to marry later in life or remaining single. The thought of going at it alone can be nerve-racking, especially if youâre used to sharing financial responsibilities with another person.
Handling finances solo will be much more manageable with an understanding of your particular financial situation.
One of the most important steps to a well-rounded financial education is understanding your portfolio. What investments do you own? Knowing the allocation of investments like stocks, bonds and mutual funds will better position you to rely on them for retirement income.
5. Donât be afraid to seek help
In my 30-plus years as a financial services professional, Iâve found that women seek much more than investment advice when it comes to managing their finances. They appreciate a trusted advisor who encourages them to become more engaged in their financial affairs giving them the confidence to stay on track with their long-term financial goals.
It is challenging managing your householdâs finances, caring for your family and excelling in your career, but it is possible. Taking a more proactive role in your financial affairs will help alleviate anxiety associated with managing money.
Ellen T. Jordan, CFP, is a senior vice president and womenâs wealth advisor at Bryn Mawr Trust. Jordan is a graduate of the Masters of Womenâs Advisory program.
The views expressed herein are those of the author as of the date above and are subject to change based on market conditions and other factors.