Some women handle their money brilliantly all the time- in a perfect world. It is crucial to be connected with your finances. However, most of us are in dark about our finances for reasons like misunderstanding terms or not being involved enough. Luckily, there is always time for you to become engaged. The tips below will help you become involved with your personal finances:
Do you let your husband or partner manage money without your involvement? Change happens all the time in relationships, don’t start learning about your finances while you are in shock.
Do not sign your joint income tax return without reading it. Make sure you understand and thoroughly read your income tax return. If you need to, consult a professional; but don’t rush into signing anything.
Do you use your husband’s financial advisor, even if you don’t really like him, know him, or can’t stand him? At your next meeting with your Advisor, ask yourself how much YOU were engaged in the conversation. If not, consult with your partner and try to find an Advisor both of you can be engaged with.
Not taking enough risk. We women tend to be more against taking risks. Women live longer lives; we retire with two-thirds the retirement savings of men. This calls for greater risk taking to earn a higher return. Many women HAVE to push themselves to do this.
Not seeing your money as a means to express your values. Value is defined as a person’s principles or standards of behavior. Many women express their values through the products they buy, the way they spend their time, and the companies they work for. However, few women view their investments as a tool for expressing value. Today, the new industry can represent a way for women to have their money work at more than just earning a financial return.
It is time for you to become engaged and find success in your finances! Take control now! Did you find this email helpful? I’d love to hear from you, please post feedback to Financially Savvy Women Fanpage.
All human brains have reflective and reflexive thinking. However, the way the female brain is structured makes women tend to be more focused on care-giving, passing on money and life values to the next generation, and using wealth to better the community as a whole. The three areas of the brain that will be discussed are the Amygdala and Limbic System, Hippocampus, and Corpus callosum:
Amygdala and Limbic System: The Amygdala is the center for emotion, fear, and aggression. It is located in the Limbic System and is the part of the brain responsible for the fight or flight response. The female brain’s limbic system is typically larger than the male’s. Scientists hypothesize that the larger limbic system contributes to women being more compelled to care for others.
Hippocampus: This part of the brain is the center of emotion and memory formation. This section of the brain is larger in women than men and accounts for a woman’s ability to remember specific details. The larger hippocampus also could contribute to some women wanting their Financial Advisors to remember personal details about their life.
Corpus Callosum: This part of the brain transmits signals and connects the left and the right side of the brain. Women have more connections between the left and right hemispheres, making them excellent at multitasking and verbal communication.
Kingsbury, How to Give Financial Advice to Women
Do you have any past experiences that reflect the new information you just learned about your brain?
Women worry more about their financial health but lag in decision-making and self-confidence:
This difference in self-confidence has an enormous impact on the financial planning industry. A LPL Financial “Women Invest White Paper” survey shows that 67% women want an equal role in financial decision making and only approximately 20% want their husbands to make all the decisions. Yet, data shows less than two-thirds of women actually attain an equal role in financial decision-making (note: financial decision-making here refers to “big ticket item decisions,” not grocery shopping level daily or weekly decisions).
An ideal advisor will listen to both women and men – regardless of the gender of the financial decision-maker – and will avoid being patronizing toward both women and men if they lack financial understanding. Women prefer to work with female advisors, when possible. Although women comprise more than half the financial planning/investment clients in this country, fewer than one-quarter of Certified Financial Planners® (or other credentialed advisors) are female.
Kaplan, Women and Money: Why They Avoid Risk and Lack Confidence when Making
Don’t feel patronized or left out of your financial future. Whether you’re single, married, divorced, or widowed, let’s talk about how I encourage women to take on a greater role in the decision making process. Contact me today.
Do you think that you deserve more money than you are earning? Here are 5 tips for developing your self-worth which in turn develops your net worth:
Think Big, Then Think Even Bigger: The idea is to think in terms of what you are worth, not just what you assume the market will bear.
Do Your Homework: One of the worst negotiating mistakes women make is picking a number out of the air that’s way too low.
Take the Initiative: Have tangible evidence of what you bring to the table. Every time you accept more responsibility, successfully complete a challenge or create positive changes, document it.
Daily Affirmations: Affirmations are positive statements expressed as if they’ve already happened. When you act as if you’re worth a lot, you’ll eventually convince yourself as well as others.
Challenge yourself in other areas: A stretch in any area of life has a ripple effect in other areas as well. Anything that puts you out of your comfort zone builds confidence and self-worth.
By implementing these tips, you’ll begin to notice a shift in how you feel about yourself. Making more money is not something that you should do, but it is something you have to do, because you know you are worth it.
(Barbara Stanny, 5 Tips for Getting Paid What You Really Deserve)
As you age, you may find your parents struggling with illness as they age as well. As their daughter, you may be responsible for their care. The emotional and financial strain can be exhausting and the commitment may compromise your career. It can be difficult know where to start when helping your aging parents. Here are some questions to ask yourself to get started:
What institutions hold your assets?
Ask your parents for a list of their bank, brokerage, and retirement accounts, including account numbers and online usernames and passwords, if applicable.
You should also know where to find their insurance policies (life, home, auto, disability, long-term care), Social Security cards, titles to their house and vehicles, outstanding loan documents, and past tax returns. If your parents have a safe-deposit box or home safe, make sure you can access the key or combination.
Do they currently work with any financial, legal, or tax advisors? If so, get a list of names with contact information.
Do they have a durable power of attorney? A durable power of attorney is a legal document that allows a named individual (such as an adult child) to manage all aspects of a parent’s financial life if he or she becomes disabled or incompetent.
Do they have a will? If so, find out where it’s located and who is named as executor. If it’s more than five years old, your parents may want to review it to make sure their current wishes are represented. Ask if they have any specific personal property disposition requests that they want to discuss now.
Are their beneficiary designations up-to-date? Designated beneficiaries on insurance policies, pensions, IRAs, and investments trump any instructions in your parents’ wills.
Do they have an overall estate plan? A trust? A living trust can help manage an estate while your parents are still living.
(Questions from 360 degrees of financial literacy)
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The independence that comes with divorce can be overwhelming, especially when dealing with your finances. You are in a strong position if you are familiar with all aspects of your family’s finances and have played a strong role in the financial decision making. If you are not familiar with your finances, this is the time to be prepared. Be involved as a partner, not a supporter, when discussing your finances. Take the lead! The advice of a financial professional can also be helpful.
Below are tips 7-10 of the investing tips and explanations series.
7. Inflation may be the biggest threat to your long-term investments.
While a stock market crash can knock the stuffing out of your stock investments, so far — knock wood — the market has always bounced back and eventually gone on to new heights.
8. U.S. Treasury bonds are as close to a sure thing as an investor can get.
The interest rate of Treasury’s is considered a risk-free rate, and the yield of every other kind of fixed-income investment is higher in proportion to how much riskier that investment is perceived to be.
9. A diversified portfolio is less risky than a portfolio that is concentrated in one or a few investments.
Diversifying lessens your risk because even if some of your holdings go down, others may go up. However, a diversified portfolio is unlikely to outperform the market by a big margin.
10. Index mutual funds often outperform actively managed funds.
In an index fund, the manager sets up his portfolio to mirror a market index, rather than actively picking which stocks to purchase. Index funds often beat the majority of competitors among actively managed funds.
Here are the explanations for investing tips 4 – 6.
4. The biggest single determiner of stock prices is earnings.
Over the short term, stock prices waver based on everything from interest rates to investor sentiment. But over the long term, earnings are what matters.
5. A bad year for bonds looks like a day at the beach for stocks.
In 1994, intermediate-term Treasury securities fell just 1.8%, and the following year they bounced back 14.4%. By comparison, in the 1973-74 crash, the Dow Jones industrial average fell 44%. It didn’t return to its old highs for more than three years or push significantly above the old highs for more than 10 years.
6. Rising interest rates are bad for bonds.
When interest rates go up, bond prices fall. Fixed interest on a new bond will pay more because rates in general go up.
Had trouble with any definitions from the list of investing tips? Here are some explanations!
1. Over the long term, stocks have historically outperformed all other investments.
Stocks have always provided the highest returns of any asset class, close to 10% over the long term. The next best performing asset class is bonds.
2. Over the short term, stocks can be hazardous to your financial health.
On Dec. 12, 1914, stocks experienced the worst one-day drop in stock market history — 24.4% . Oct. 19, 1987, the stock market lost 22.6%. More recently, the shocks have been prolonged and painful: If you had invested in a Nasdaq index fund around the time of the market’s peak in March 2000 you would have lost three-fourths of your money over the next three years. And in 2009, stocks overall lost a whopping 37%.
3. Risky investments generally pay more than safe ones (except when they fail).
Investors demand a higher rate of return for taking greater risks. The longer investors have to wait for their final payoff on the bond, the greater the chance that something will intervene to erode the investment’s value.