I’m not saying that none of this applies to men, of course, but since the presentation was geared toward women I’m going with the theme.
Let’s start with some motivation. Why should you bother to get your financial sh*t together?
1. So you’re not poor when you’re old and can’t do anything about it. Here’s a sobering statistic for you: women are 80% more likely than men to be impoverished at age 65+ (Kara Stiles, Forbes, 2017). Think about that for a moment. Yes, you already know I’m not above using a little fear to motivate you.
2. So no one else suffers if you die or get sick or hurt…and you can afford to get the right care and not be a burden on anyone. One of the top concerns I’ve heard from women clients is that they never want to be a burden on their family. Here’s your chance to prepare and avoid that.
3. So you can stop worrying and rest easy. From what I’ve seen in my practice, women worry about money more than men, and with good cause: see that statistic in point #1 again. You don’t need that bad juju up in your head all the time. Face it, deal with it, and plan it into submission.
4. So maybe you can help someone else down the road. A lot of women dream about leaving a legacy for their family, and/or donating money to some worthy cause they care about. What a great reason to build savings and get that estate planning done.
1. Financial Independence (sometimes called retirement): Will I run out of money before I die? If so, when, and what can I do about it? When can I stop working for money?
2. Investing: How should I invest to give myself the best chance of meeting my goals?
3. Risk: Do I have enough insurance and money to make sure everyone who depends on me is financially OK if I die, get sick or hurt, and/or need long-term care?
4. Estate: Will my assets go where I want them to when I die, or will my family be torn apart by disagreements over who gets my original Girl Scout Uniform? Will my heirs be financially OK, and will it be as easy as possible for them to settle my estate? Will the bunny shelter get the money I promised them?
And finally, I have some advice to keep in mind as you get your sh*t together. Again, this advice can work for anyone, not just women:
1. Always have your own cash reserve and your own credit. Yes, even if your partner is a multi-bajillionaire who will worship you forever. I can’t tell you how many women I’ve worked with whose expectations were sorely disappointed after a divorce.
2. Always save for your own retirement (still yes, even with the bajillionaire).
3. Get a prenup even if you and your partner will worship each other forever and a prenup is just SO unromatntic. More on that here.
4. Invest most of your retirement savings in a broad portfolio of stocks, meaning not just bonds and cash. Women tend to take fewer financial “risks” than men, and it shows in the value of their portfolios when they retire. The real risk is running out of money because you were too conservative, my dear, not losing it all in a well-diversified portfolio of stocks.
5. DO NOT TAKE THE HOUSE IF YOU ARE DIVORCING. Or at least have a neutral third party analyze that situation before you cling irrationally to the house. I’ve seen too many women buy their ex out of the house, which leaves them cash-poor and oftentimes struggling to keep up with the mortgage and maintenance. Try to reduce expenses if you get divorced, rather than increasing them.
6. Don’t let your partner manage your money without your involvement; get in there. No, I don’t care if you don’t like it or you’re bad at it or it’s awkward. Put on those big-girl pants and take responsibility for your financial life. I know you will love each other with the intensity of 100,000 red-hot suns until the end of time…until you don’t. Then you will thank me.
7. On a related point, realize that you are not as bad at math and/or finances as you think. You also have a great capacity to learn. Stop paying attention to the crap you learned as a girl about who’s better at math and who should just shut up and let the Expert handle it. You got this!
While you’re at it, why not hire a woman advisor? You can get your financial sh*t together while you’re supporting a woman in her business. You may even find that she’s a lot more empathetic and a lot less patronizing than the usual male advisor, based on what I’ve heard from women clients.
Sisters, I wish you the greatest success in these endeavors, and I hope you find the peace of mind you deserve.