What All Women Should Know About Personal Finance
Ricky Biel, CRPC?
Founder of Affluent Professional Networking Group, Providing Alternative Investment Advice to Accredited Investors
Things have drastically changed for women in the past few decades. Not only do women make up 50% of the workforce these days, (1) but they are also starting to play an increasingly important role in managing their household’s finances. (2) Gone are the days when husbands were the only ones in control of the family’s finances.
It’s great news that women are starting to take ownership of their finances, especially since they tend to face financial challenges not often faced by men. Women typically earn 81 cents of every dollar earned by men, (3) and they usually spend fewer years in the workplace because they may take time off work to raise children or take care of elderly parents. Because women generally live about 6-8 years longer than men, (4) this means women have fewer years to save a higher percentage of their income, so they can fund their longer retirement.
Doesn’t seem fair, right?
That’s why women need to be even more informed about their financial opportunities and how to maximize what they have. Here are a few key principles all women should know about personal finance in order to succeed.
KNOW WHAT YOU’RE SPENDING
To reach your financial goals, you need to track your spending. Even if you have a high net worth, you may be surprised at how much more you could save if you cut unnecessary purchases. It could potentially equate to thousands more by the time you retire.
While it’s estimated that 85% of women make the primary decisions about their family’s day-to-day finances, that number drops down to 58% when it comes to making decisions about longer-term retirement and investment planning. (5) Since having a long-term plan impacts short-term decisions and behaviors, women need to be involved in all aspects of a household’s finances.
If you’ve left budgeting or planning up to your spouse or partner until now, set aside one night a week to go over the details and get on the same page. It could save you a lot of heartache and frustration down the road should something ever happen to your spouse or your relationship.
FIND MORE WAYS TO SAVE
Once your budget is solid, start finding ways to save more money. There are typically two ways to do this: decrease spending or increase income. The most effective way is a combination of both.
Small everyday purchases add up to a large amount of money over time. Think about ways you can decrease spending without depriving yourself. Could you make your own coffee throughout the week instead of grabbing a cup on your way into the office? If you want to increase income, could you ask for a raise at your current job, rent out your spare bedroom, or start a side job?
Whatever you do, make sure you take advantage of your retirement plan. Whether it’s an employer-sponsored plan or a personal plan, contribute as much as you can—especially if you’re near retirement. You’ll thank yourself later.
INVEST WITH CONFIDENCE
Investing is a great way for women to close the gender pay gap and save extra money for retirement. Did you know women typically have a 0.4% higher return on investments than men? (6) It’s true. But women are also more likely to keep their money in a low-risk savings account than in investments because their earned dollars are more precious to them. Breaking this cycle and having a strong investment portfolio gets you one step closer to reaching your financial goals—and living your dream life in retirement.
FIND A TRUSTED PARTNER
Given the right tools and education, women can succeed in reaching every financial goal they set for themselves. It may be overwhelming at first, but the more you know about investing and the more you do it, the easier it becomes. The best way to gain momentum in reaching your financial goals is to seek help from a professional.
At HBA Wealth, we can help you build a financial plan and investment portfolio that works for you. Want to learn more? Easily schedule an introductory consultation by contacting us at (626) 529-8347 or emailing Ricky directly at [email protected].
ABOUT HAYDEL, BIEL & ASSOCIATES
Haydel, Biel & Associates is an independent financial advisory firm serving individuals and families near Pasadena, California. The firm was founded in 2004 by Chris Haydel and Ricky Biel with a desire to provide unbiased, client-centered, community-based financial advice. Together, they have built a practice that has grown into a family of caring, smart professionals committed to blending proven investment methodologies with creative financial technologies that make it easier than ever to accomplish your goals. They strive to keep things simple and fun to give their clients peace of mind and alleviate financial stress. HBA Wealth takes care of their clients’ needs first and foremost and goes the extra mile to make their clients’ finances grow. To meet and see how the HBA Wealth team may be able to help, contact them today at (626) 529-8347 or email Ricky directly at [email protected].
The commentary on this blog/website reflects the personal opinions, viewpoints and analyses of the Haydel Biel & Associates employees providing such comments, and should not be regarded as a description of advisory services provided by Haydel Biel & Associates or performance returns of any Haydel Biel & Associates Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Haydel Biel & Associates manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.
______________
(1) https://www.washingtonpost.com/business/2020/01/10/january-2020-jobs-report/
(2) https://www.thestreet.com/personal-finance/women-are-the-new-cfo-of-the-household-14089470
(3) https://www.payscale.com/data/gender-pay-gap
(4) https://www.who.int/gho/women_and_health/mortality/situation_trends_life_expectancy/en/