1Q2018  |  All Ages

Five Financial Focal Points for Females

Physical fitness is considered to be the most underutilized antidepressant.  As we age, it becomes even more imperative to ensure a high quality of life, both physically and fiscally.

According to financial professionals at BMO Wealth Institute, women currently control 14 trillion dollars- more than 51 percent – of America’s personal wealth and are projected to control almost $22 trillion by 2020. These statistics are encouraging.  It is evident that women’s financial knowledge is growing significantly and rapidly, but a confidence gap exists. A 2014 Prudential survey found that only 20 percent of women feel secure in their ability to make sound financial decisions. This trend is troubling, because women typically face more difficult financial challenges than men do. For example, women often take more time off to serve as caregivers for children and aging family members, which yields lower lifetime income and less savings over the long term.  They also live longer.

So how can women empower themselves to be financially fit?

  1. Start from Square One

Look into the proverbial financial mirror. Set a goal. Nobody runs a marathon on day one of a training regimen. A better plan is to start small, lift light weights or jog a mile and slowly building up to bigger goals. With respect to investing, wade slowly into the waters of retirement.

Begin with the end in mind. Create a budget. Just as a good diet requires you to document the amount and types of food you consume, a budget requires you to track your spending. With a thorough accounting of the credits and debits that take place in a typical week, you can spot where money is slipping away and adjust your habits. Now you are ready to take the next steps in financial training.

  1. Read Financial Materials Voraciously

When investing, women would be wise to copy the traits of successful investors. Warren Buffett is one of America’s most noted investors, because he fills his brain with financial knowledge. Women do the same. Check out “The Charles Schwab Guide to Finances After 50 by Carrie Schwab-Pomerantz”; “Women’s Worth: Finding Your Financial Confidence by CFP Eleanor Blayney”; and “The Investment Answer” by Daniel Goldie and Gordon Murray. Also, consider enrolling in a personal finance course at your local library.

  1. Seek out a Financial Trainer

The best way to enlighten yourself on important financial matters is to speak with an expert. You can find one through the databases of the National Association of Personal Financial Advisors, the Financial Planning Association or the Certified Financial Planner Board of Standards.  A financial coach can help keep you on track with your plan and goals.

  1. Prioritize Yourself in Savings

Women often put themselves last. Between raising children, working and taking care of elderly parents, they often have little time left for themselves. To be truly financially fit, women need to set strict parameters around their financial goals. Just as you get your morning run or habitually brushing your teeth, you need to do the same with your hard-earned money. Although a 529 plan is a nice idea for your children, if your choice is between that and your retirement fund, you should choose your retirement fund. Your children can earn money to pay for college, if necessary, and they have time on their side to pay off student loans if borrowing becomes necessary. The same is not true for rebuilding your nest egg.  Make a habit of saving for yourself first.

  1. Converse Collaboratively

Married women are advised to talk to their spouses about finances. Collaboration always trumps going it alone. Just like having a solid work-out buddy at the gym, working together enables you to get more accomplished and stay committed for the long haul. Buffett says, “If you’re not going to be in the market for 10 years, don’t be in it for 10 minutes.” A partner can keep you focused on long-term goals which ultimately are the most important.

Remember that the earlier your embrace the habits of financial and physical fitness, the easier both are to maintain.  Mothers, talk to your daughters and get them started young on positive financial decision making. Check out Beth Kobliner’s work, “Get a Financial Life: Personal Finance in your 20s and 30s. It is interesting to note that women in their twenties tend to spend while men save, but this trend seems to reverse itself as we age.

Ultimately, physical fitness and financial fitness are keys to a healthy and prosperous life.  Effort in one realm will bring positive results to the other, which will continue a self-perpetuating success loop.  This is my greatest desire for all women ready to embrace their potential.


Melanie Warren
Financial Advisor
[email protected]
Advisory services offered through Prime Capital Investment Advisors, LLC. (“PCIA”), a Registered Investment Adviser. PCIA: 6201 College Blvd., 7th Floor, Overland Park, KS 66211. PCIA doing business as Qualified Plan Advisors (“QPA”).

This commentary is provided for information purposes only and does not pertain to any security product or service and is not an offer or solicitation of an offer to buy or sell any product or service.

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