The 1950s image of a wife who cooks, cleans and takes care of the kids with nary a thought or say-so in her family’s money matters does not compute in 2011. Today’s woman should be engaged and knowledgeable in her financial planning, says Delo Advisors owner Sherry Delo. “Regardless of what stage or phase in her life she is in, every woman should take responsibility for her own financial future.”
That planning begins with setting goals and working with a financial advisor. “A financial plan isn’t just an endpoint—it has certain time periods along the way where objectives are identified and the plan works toward implementation of those needs,” says Sally Roth, area president at Regions Bank. Creating both short-term goals, such as buying a house, and long-term goals, like investments and retirement plans, is essential.
For married couples, money decisions should be made together, Delo says. “It’s important for both the husband and wife to know what is going on financially. When two people work on something like that together in a cooperative spirit, it’s healthy for the financial future, as well as the marriage.”
Awareness of her monetary position becomes even more important for a woman if her marriage dissolves. “Women need to understand all aspects of their financial situation so they are prepared if there’s a reversal of circumstances,” Roth explains.
The potential of widowhood also is a factor to consider during financial discussions, says Cindy Rapponotti, senior VP of Commerce Trust. “In general, the longevity for women is longer than men, so they need to plan for a long time horizon and potentially part of that time, in singlehood. They need to ask themselves, Do I have the funds to last my whole lifetime?”
While the notion that women shouldn’t be involved in money matters is an outdated one, both men and women could benefit from more financial education early on.
“I think sometimes, they don’t understand the connection between what’s coming in for income and what they’re spending, and how much that impacts their ability to save and invest for the future,” Delo notes. “I’d like to see those concepts taught earlier in school so there’s less overspending through credit cards.”
Rapponotti recommends that women read as much as possible to increase their knowledge, looking to resources like the business section of The New York Times or Kiplinger’s.
Women also should not be afraid to ask their advisor questions “so they have a grasp of what the financial plan is intended to do and they are comfortable with that plan,” Roth says.
At any level, open communication between a woman and her advisor will help alleviate fears and achieve objectives for her financial future.
“This is not a pastime; it’s not a sport,” Rapponotti warns. “It’s serious business. All women should have a good financial strategy for their lives.” LN