Financial Advice For Women
Adjusting to a new financial life during and after a divorce can be a learning curve for some women. We contacted several experts for the best financial advice available for women. Here are six tips to help you get started on the road to financial freedom.
You Need an Emergency Fund
People are generally aware of the importance of having an emergency fund, especially after the great recession, but many generally don’t understand how much they should put into their emergency fund. That’s because many don’t budget or understand how to budget. You should have at the very least, six months’ worth of expenses in an easily converted savings account. It will be precious money for the unexpected surprises (i.e. unemployment, divorce, death in family, moving etc.).
One of the most overlooked items in preparing a household budget is gifts. Wedding gifts, birthday gifts, graduation gifts, Christmas gifts – it can all add up to an amount easily in the hundreds of dollars. But it’s usually the emergency (unplanned) items that tend to destroy a budget, such as vehicle repairs or unexpected travel. That’s why it is important to budget for your savings, so these unexpected expenses can be paid from there. A good rule of thumb is 5% of take home pay per month.
Ryan Himmel – CPA, Personal Finance Expert, and founder of BIDaWIZ.com
You Have to Bother
The biggest mistake people make with their money is they don’t bother. No matter where you are in life or your situation, you have to know what is going on with your money and what you are doing with it. This means that every month you have to take the time to sit down and do a written budget.
List all of your expenses, including savings and debts, for that month until every income dollar has an outgo name. You must do this each month, because each month is different. You must also stick with your budget once you have created it. By taking the time to create a budget, you will have a sense of control over your finances.
Chris Hogan – Director of Dave Ramsey’s Financial Coaching and Counseling Division – www.daveramsey.com
How to Get the Answers to Your Financial Questions
First, acknowledge where you are on your financial management learning curve – Are you a brand new beginner? Are you taking care of the basics of tracking your cash flow and are ready to learn more? Be clear that there’s much that is yet to be discovered and have a mood of an explorer in a foreign land – be curious and interested and know that the only “dumb” question is the one you don’t ask.
Then, as you begin to ask your questions to learn more about your finances from a potential advisor, Get the Data — how do they respond? Do they look you in the eye and speak in a respectful tone and at a pace that honors you and where you are? You get to set the standards for how they relate to you – and always remember, if you’re not satisfied with how you’re being treated, and if you don’t feel you’re getting the respect and answers you need, you can find someone else who will educate you as you seek to learn more about how to responsibly manage your own finances.
Emily Bouchard – Wealth Legacy Group – www.wealthlegacygroup.net
It’s Your Money, So Demand Respect
Many women have found the world of investing intimidating, and its professionals less welcoming than would be expected. Often, the male dominated brokerage world has dealt with clients of their same gender, neglecting to realize the financial affluence and sophistication for which women have attained. It is important to let the financial service professional know your expectation of them. Do not let them drive the relationship.
For those women who do not have prior investment experience, you should be honest in letting any financial professional know that fact and request that they take time to provide a thorough education relating to issues impacting your finances. It is important to let them know that you will also be visiting with others, as this will serve as a warning to them that any recommendations they make will be scrutinized by others. If you feel any anxiety in dealing with this individual then it is best that you find someone who can communicate with you without generating such anxiety. If your assets are substantial, you should be able to access those professionals who deal on a fee-only basis, thereby bypass the commission based product salesmen. It is your money, so make sure the money and the financial advisor are working for you.
Steven R. Goodman, CPA, CFP(R) – Money Manager, Financial Advisor, Philanthropy – www.goodmanfinancial.com