As women’s roles expand in our workforce, communities and family networks, so too do their responsibilities. Women are increasingly independent, personally and financially, often supporting both themselves and other family members. Yet gender-specific issues like lower earnings and longer lifespans continue to challenge their long-term financial security. Here are five essential money tips every woman should follow.
1. Don’t Be a Silent or Absent Financial Partner
If you’re in a relationship, be financially present too. Financial complacency puts you, and potentially your loved ones, at risk. You might even be placing additional strain on your relationship by burdening your partner with all the financial decision-making. Staying involved avoids:
- Being out of touch with your financial standing;
- Not knowing if you’re prepared and/or on track for longer-term life objectives;
- Struggling to manage the finances in a crisis; and
- Becoming financially vulnerable in a marriage. (For related reading, see: Women: Invest in Your Financial Literacy.)
Review and Understand Your Tax Return, Don’t Just Sign It
Simply signing a tax return (or any document) is one of the most common financial mistakes women make. Your return is a useful document for monitoring your income and your assets. It might seem intimidating, but two easy things to look for are:
- How much your family earned (Form 1040): Your adjusted gross income (AGI) gives you a sense of your household income. Ask yourself if you’re making wise spending and saving decisions relative to this figure.
- What investments you own (Schedules B, D & E): Be aware of the assets you own, which are typically identified on Schedules B, D and E. If an account or entity is listed, you should know how it’s titled and its value. Ideally, you also should be aware of retirement assets (e.g. IRAs, 401(k)s) that might not appear on the tax return. (For more from this author, see: Is Maxing Your 401(k) Contribution Enough?)
Be Cognizant of Your Personal Financial Security
While women’s income equality is improving, including more female breadwinner households, women are often still the lower household earners. This might be the result of being a stay-at-home mom, working part-time to raise a family, or caring for other relatives. Whatever your earning potential, make sure you’re financially protected:
- Have assets in your own name: Joint ownership can help to encourage financial involvement, but it can also leave you at risk in the event of divorce. Make sure some assets are in your name for greater individual security.
- Make contributions to a retirement savings account: Always contribute to your retirement plan, ideally maximizing your contributions. Even if you don’t work, you might still be able to contribute to an IRA, depending upon household income.
- Protect yourself with adequate life and disability insurance: If you rely upon a partner to support some or all of the household expenses, life and disability insurance will protect you and your loved ones in the event of their disability or death. Likewise, ensure you have adequate individual coverage. (For related reading, see: The Importance of Life Insurance for Women.)
- Assess if you could qualify for a loan: If you have loans like a mortgage, or may need one in the future, make sure you could qualify for a mortgage independently in the event of a death, disability or divorce.
- Maintain your skill set: If you’ve taken time off to care for children or family members, keep your skill set current. This can help ease a potential return to work in the future.
- Consider loss of benefits if you remarry: If you’ve lost a spouse through death or divorce, carefully evaluate benefits you might lose in the event you remarry, such as pensions, Social Security, or alimony.
Consider Your Potential Longevity as a Woman
As a woman, you’re likely to enjoy a longer lifespan than your male counterparts. You’re also more likely to be single at some point in your life, but especially in later years. Being alone as you age requires financial and emotional security, and ongoing participation in your finances. Be sure the financial decisions you are making will allow you to enjoy today, as well as amass adequate assets to sustain your potential longevity. Research long-term care insurance to protect yourself against the greatest cost in retirement, and ensure you have a group of family members, friends and/or professionals to assist and support you as you age.
Don’t Be Too Conservative or Too Generous With Your Money
Women tend to be more conservative when it comes to investing, and they often focus more on what money can do to help others instead of themselves. Make sure you’re not missing out on investment opportunities by being overly conservative (e.g. only investing in CDs or annuities). Furthermore, be cognizant of your own financial needs relative to those of your family and/or charitable interests.
One of the easiest, yet most effective, ways for any individual to achieve financial empowerment is to partner with a trustworthy, experienced advisor. Look for a fee-only fiduciary, meaning advice will be unbiased and focused solely on your best interests. If you’re a woman, consider a wealth advisor who offers services specifically tailored to women, including customized planning designed to support your unique personal and financial objectives. (For more from this author, see: 10 Finance and Relationship Tips for Working Women.)
cr. https://www.investopedia.com/advisor-network/articles/5-money-tips-women/
ไม่มีความคิดเห็น:
แสดงความคิดเห็น