Women And Money…Let’s Talk.

April 30, 2016

Why do so many of us delegate financial responsibilities to others?     

financial-responsibility-imageMany women are in charge of their financial lives, and proudly so. Some have become their own financial captains as a result of life events; others have always steered their own ships. Even so, there are many women who are left out of financial decision making – some by their own choice. This may be a mistake. Allowing a spouse or partner to handle financial affairs may predispose a woman to a lack of money knowledge – an education deficit that may allow a couple to slip toward indebtedness one day, or prove economically crippling in the event of a divorce or death.

Inherited perceptions about wealth can shape your outlook. If your parents saw wealth in terms of material items linked to prestige and present-day satisfaction, this could influence your definition of wealth. Seeing wealth in terms of creature comforts invariably associates wealth with spending, and spending can promote debt. If your parents were “millionaires next door” and lifelong savers who had a habit of living within their means, your attitude toward money may be wholly different. Their thrift may have resulted in them getting rich slowly – a good and realistic model for growing wealthy. They may not have had the biggest house or the hottest coupe in the driveway, but they may have lived well.

Many of us grow up with little understanding of the way investment markets or retirement plans work. Yet the more financial literacy we possess, the more confidence we have about making financial moves, and the more confident and assertive we can become about money decisions.

If you aren’t in charge of your financial life, chances are you will be at some point. The National Center for Women and Retirement Research (NCWRR) at Long Island University estimates that 90% of women will eventually be solely responsible for their finances. A recent study from Financial Finesse (a provider of financial education to corporate and municipal employees across America) notes that while women participate in workplace retirement plans to a greater degree than men, just 43% of women had an emergency fund and only about a quarter bothered to rebalance their investment portfolios with time. Women control a great deal of wealth in this country. The dilemma is that many women earn, manage and receive wealth with no clear expectations or strategy about its future.

This problem is especially characteristic of two circumstances:

Divorce. A split may bring about a financially “equal” settlement, but there can be a big difference between “equal” and “equitable.” A woman may divorce only to find she has less earning potential than her former spouse, and an individual or family’s lifestyle may suffer as a result of the income reduction. This is a familiar scenario for women who have helped their spouses build a business or professional practice. Without strong wealth management and budgeting, there may be a money problem.

Retirement. The tendency is to protect the nest egg; in these times, who wouldn’t want to? Being risk-averse does have its downside, however. Some women adopt an extremely conservative investment approach, and their portfolios earn so little that their retirement incomes can’t keep up with even moderate inflation. Without a growth investment strategy, the risk of outliving your money may increase.

The more knowledge you have, the more confident you can become. When you acquire more financial knowledge, you can shatter money myths that may have crept into your life and replace them with truths. You can see your financial behavior in a new light and adjust that behavior to give yourself a better chance at amassing significant retirement savings and lifetime wealth.

At HFG Wealth Management, we embrace a holistic method of financial planning known as Financial Life Planning™. We believe this is a financially effective and personally rewarding approach to creating a practical, lasting financial plan. As financial professionals using the life planning approach, our purpose is to assist individuals and families in creating a long-term vision that is consistent with their core values. At HFG we recognize that life events and life transitions can impact your financial responsibilities and your vision of the future. We are here to provide you with tips and strategies to get you started and help you reach your financial and life goals at every stage. For more information, please visit www.hfgwm.com or call 832.585.0110.



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