The Department of Labor indicated that 57% of all women are in the workforce and 70% of them are mothers with children under the age of 18. These staggering numbers reveal that women are more responsible than ever for making the financial decisions.
Another study revealed that only 29% of women age 50 and older passed a financial literacy assessment that consisted of questions about the time value of money, calculation of interest rates, inflation, and the difference between stocks and mutual funds.
In essence, women are less financially knowledgeable than men. According to a recent Forbes article, women are also less financially confident than men.
So what are women to do since its clearly necessary that they understand personal finance, as well as have basic knowledge about investing, college planning, and retirement? Below are steps to help women overcome their financial woes.
- Pull your head out of the sand. Stop ignoring the fact that you don’t know about financial matters. Your continued lack of knowledge will not change your situation. The first step in change is admitting that it is necessary. Be honest with yourself, and with others. Do not be ashamed; the only shame is keeping your head in the sand.
- Read, Read, Read. This is the next step after taking your head out of the sand. Find books that are simple and practical, and provide easy explanations to financial terms that you do not know. I like the Investing for Dummies series or any beginning investing book. I do not advise you to take investment advice from these books, but they provide explanations to terms that may seem intimidating.
- Establish financial goals. A man without vision will perish. Take the time to develop financial goals. For example, when do you want to be debt-free, how much money do you want to have when you retire, does debt-freedom in retirement mean that your home is paid off, if you become ill and require nursing care, how will that be handled? Write your plan down, no matter how
silly and unattainable it seems.
- Interview and hire a trusted financial adviser. This person should be someone with whom you can be transparent. They must also do everything to ensure you have a good understanding of your options in relationship to your goals and the industry. They must be honest with you about your goals and the steps to attainment. Your financial adviser must put your needs above theirs, and be someone you can trust-completely.
- Continue to educate yourself regarding your finances. Although you have a trusted financial adviser, it is your responsibility to monitor your finances. Reading books and publications, as well as talking with your adviser a few times per year is recommended. In fact, a good adviser will contact you at least once or twice per year to ensure there were not any life events that require a minor or major adjustment of your financial plan.
Ladies you can successfully manage your finances, one positive decision at a time and #StopBroke-i$m.