In 2021, women across the nation are doing incredible work to improve the financial situation for themselves and their families. But there’s always more to do! This American Business Women’s Day, we share some management, budget and investment advice for women entrepreneurs, pre-retirees and retirees alike.
With a little planning and encouragement, women can not only gain financial independence but also lend valuable advice to their family members regarding various aspects of investments. So, how can you, as a woman, do so? Let’s find out.
Financial Planning & Why Women Should Take Part
A financial plan is a document that lays out where you stand now financially and where you want to be in the future. Based on those aspirations, a strategy is developed to meet your goals. You can create a financial plan on your own or with the assistance of a financial advisor. A good financial plan is more than just a budgeting exercise or a hands-off investment strategy.
Working with a financial advisory firm that offers everything from investments to estate planning services will help you create a comprehensive financial plan that addresses your dreams and lifestyle. Women should take part in financial planning because of the different variables they deal with such as:
- Unpredictability of relationships – This can mean many things. Such as getting married/divorced, or outliving your spouse. It’s important to not rely heavily on their finances when problems arise.
- Risk Aversion- Women were not encouraged to pursue careers in finance and therefore weren’t taught investing principles. That has resulted in a lack of confidence among women and one of the reasons they invest 40% less than men.
- Gender Pay Gap – Men make more than women, which means women need to be extra vigilant as they save and invest. For every dollar a man makes, a woman earns 82 cents.
Financial Planning Benefits For Women
- Financial planning speeds up savings
The nation collectively is doing a poor job of saving – be it for an emergency or retirement. But people who have a financial plan tend to save more than those who wing it. A plan helps you save strategically. After all, it’s important not only to contribute to your savings regularly but also to make sure that the vehicles you use for your savings are the best options available.
You don’t want your money to lose value because it’s in an account that can’t keep pace with inflation. Nor do you want to look back 15 years from now and realize that if you’d only made a few slight shifts to your investment portfolio, you could have saved twice as much.
- A financial plan can result in smarter investment decisions.
Investing should be easy – just buy low and sell high – but most of us have trouble following that simple advice. But investors sometimes can act on emotion and end up buying high and selling low. A big plunge in share prices is going to have a lot of investors cashing out of the market. But history has proven that is a costly mistake. Take the Great Recession of 2008 and 2009 for example. Those who stayed the course recouped their losses and then some.
Why were some able to withstand the near term pain for long term gains? A financial plan. A thought out financial plan can keep you on course for years. If the plan is solid and crafted by an experienced financial advisor, you won’t have to worry as much about the gyrations in the stock market. Stocks rise and fall, but if you stay the course over the long term you’ll ultimately come out ahead.
At the end of the day, there are principles and strategies that may enable you to put together an investment portfolio that reflects your risk tolerance, time horizon, and goals. Understanding these principles and strategies can help you avoid some of the pitfalls that snare some investors.
- A financial plan helps you achieve your dreams and avoid bumps in the road
Do you want to retire by a certain age? Avoid becoming a burden to children? We can help you achieve the peace of mind that accompanies financial stability. With a financial plan, you can not only help identify what’s most important to you, but create manageable steps to attain what matters most.
Moreover, worry and worst case scenarios can keep you up at night. Perhaps yours is outliving your retirement savings. Or maybe you dread being cleaned out of your savings due to an unexpected illness or injury. The truth is that your worst case scenario might be a real possibility without a financial plan and the preventative measures it promotes.
Every woman has unique needs and priorities that differ from others. Women want to be able to walk away with knowledge and their concerns addressed. That requires patience on the part of the financial advisor.
Shining light on American Business Woman’s Day – and as a female in charge of her own financial future – find a planner you trust and who will customize a financial plan for you while being sure to account for the unknowns life will throw your way.
At Johnson Wealth and Income Management your worries will be rest assured by our team of financial advisors that work specifically to target your needs. For more information on our financial planning services, contact us today!
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