Why women should learn to manage their finances
This article was featured in the Personal Finance section of El Nuevo Herald on Sunday, February 28, 2016. The article highlights the many reasons why we at TFA strongly urge both partners in a relationship to attend our meetings. Please find the link to the published article at the bottom of this post.
Recent statistics show that women make up almost 50% of the workforce yet it is surprising to me that very few women take the time or show interest in understanding the world of financial planning. In many households women now earn as much money as their husband, if not more.
After all, how can a couple be financially successful, if they aren’t on the same page with respect to financial planning?
What’s the problem?
In many cases, we find that it is the husband that meets with financial advisors, lawyers and accountants. They often say, “My wife is too busy” or “she isn’t available at this time”. This is a big mistake whether or not the woman works or stays at home to raise the family. I’ve even had a few women say “I don’t understand any of this” – well you should and your financial advisor should take the time to help you understand.
What should women do?
Woman should know and be comfortable with all the financial advisors – develop a relationship with these professionals. They should understand the overall financial picture of the family, specifically the following:
- Total income – who earns what and what happens if one spouse is unable to work?
- All family assets – location and their values, such as investments, properties, etc. Understand whose name the assets are in and what happens in the event of a death or divorce.
- Debts balances – who owes what and what are the plans to reduce debts.
- Available life and disability insurance – Is coverage sufficient?
- Retirement savings – Review ability to take advantage of these benefits through your employer.
Why is this so important?
First, should something happen to the husband, it is sad how many women find themselves at a loss for what they need to do next. They’ve never had to manage their finances or worst never paid a bill or made a deposit to the bank. It can be stressful enough if the husband has died suddenly or they have to go through a divorce, but not knowing what you have to fall back on is scary.
Women should do their own financial planning. Ask questions like, what benefits, if any should I be taking advantage at work and why are we doing this, where does the money go? If they are not working because they are raising young kids, they should care about planning the husband has done to make sure they will be financially okay should something happen.
Where to start?
If you are married, start discussing this with your husband. Express an interest in understanding the financial picture and start attending meetings or calls.
Otherwise, take time to meet with a financial advisor. Women should never feel bad about asking questions when things are not clear. If they are working with a financial advisor, accountant or lawyer who doesn’t have the patience to educate them, then that’s a sign that they need to change advisor. Simple enough.
Link to the article in El Nuevo Herald:http://www.elnuevoherald.com/noticias/finanzas/article62883657.html