5 Money Questions for Women Program Recap

Thank you to Joseph Carty and Gerard Raho from Edward Jones for their presentation on what women need to consider when planning for their financial future. While everyone’s financial situation is different and needs to be addressed individually, women have some extra considerations to think about. For example, women generally live longer than men so their money needs to last longer. Also, women are more likely to be out of the workforce while caring for children or older family members rather than men so they may have to stay in the workforce longer or work more jobs to ensure they have enough money in retirement.

So let’s take a look and see what questions we should consider and how to best tackle them.

The Five Questions

1 – Where Am I Today?

The first thing one should do when trying to plan for the future is take stock of what your situation looks like now.  Am I close to when I want to retire?  Am I making enough to put away or am I living paycheck-to-paycheck?  Do I plan on having a partner or children?  What financial services do I already have; pension, IRA, 401k, 529 Plan, Life Insurance, Long Term Care?  Only by examining where we are now can we start to make a path toward where we want to be.

This requires self-examination and the willingness to face potential harsh realities.  Being financially insecure can cause stress or shame, making it a significant hurdle to get over, but one that must happen to make change.  It can also be a big strain in relationships, but ignoring the reality will only lead to more insecurity and missed opportunities to improve your financial well-being.

2 – Where Would I Like to Be?

You need to make your money work for you, so you need to ask yourself what is important to you, what do you envision your money doing in 10, 20, 30+ years.  What are your personal values and your financial goals; do they compliment or conflict with each other?  Is retirement the most important thing to you right now; what about your child/children’s education?  What is your ideal life-style; is it realistic?  All of these questions will help you answer “Where would I like to be?”.

There are some common primary financial needs to consider when determining your financial future.  These include planning for retirement, living in retirement, paying for education, preparing for the unexpected, and planning your estate/inheritance.  These needs will each take precedence at different times and in response to different circumstances, but should become considerations you address at the outset and re-address as you age.

3 – Can I Get There?

Now that you have an idea of where you want to be in life, are you able to actually achieve it?  This is where proper-goal setting, whether on your own or working with a financial advisor, can make all the difference.  When looking to set your goals, try setting SMART goals:

• Specific – Instead of “I want to retire in comfort,” try “I want to retire by age 70 and spend $60,000 annually.”  The more specific you are, the easier it is plan for that goal and keep yourself accountable.
• Measurable – Instead of “I want my money to grow,” try “I want my investments to reach $100,000 in 10 years.”  Goals are meant to be achieved, so make sure you have some metric to measure whether you met your goal or not.
• Achievable – Be realistic.  You may want to pay off your home in 10 years, but do you have the necessary funds to cover a lost job or sudden medical emergency?  Instead, plan for 20 years and make gains where you can, when you can.
• Relevant – Make sure your goals are what you want, not what someone else is telling you they should be.  Do what is best for you.
• Time-Bound – Set a time-limit for a goal, or at the very least when you will evaluate your progress.  This will help you stay on track and help prioritize which goals are the most immediate.

4 – How Do I Get There?

Planning, planning, planning.  Have a plan for the expected (retirement, education, elderly care, buying a home) as well as the unexpected (sudden death, medical emergencies, loss of a job).  This can be done alone or with a financial advisor.   Part of the planning process may expose some difficulties in your goals.  In order to have enough money in retirement, for example, you may have to work a few more years or find a way to reduce your monthly expenditures.

Once you have a plan, it is just as important to stick to the plan.  Just because the stock market had a bad day, month, or year, your plan may be for the long-haul and those fluctuations are not as important.   This does not mean sit back and never take action.  Plans should be evaluated and re-evaluated to ensure they are meeting your goals.  Set a time-frame to examine your plan and be willing to make changes to the plan to meet new or changing circumstances in your life.

5 – How Can I Stay on Track?

Evaluate.  Evaluate your goals, your financial situation, and your plans.   Life happens and you might need to shift things around to make it work; maybe you need to adjust your asset allocation or cut back on spending to increase your savings.  Don’t be afraid to admit is something is not working either.  The earlier you can recognize a problem, the less damage it will do to your financial future.

Ask for help.  It is very difficult to do this alone and statistically speaking, you will generally make less money than working with a financial professional.  Look for someone with a “Financial Advisor” designation as they have to act as a fiduciary, meaning they have to work in your best interest rather than what will make them the most money.  Before working with any financial professional, check with the NJ Bureau of Securities, https://www.njconsumeraffairs.gov/bos/Pages/cbyinvest.aspx, to make sure they are registered.

More Information

Unfortunately, there is no one-size-fits-all approach to financial planning.  Each person is different; they have different circumstances, goals, and means.  Therefore, each person’s plan to financial security is going to be different.  This is especially true for women who tend to have more financial challenges when caring for children or aging family members.  For more information on making the most of your money and planning for your financial future, please contact Joseph Carty at Joseph.Carty@edwardjones.com or Gerard Raho at Gerard.Raho@edwardjones.com.