By Elizabeth Dreyer, financial advisor, Certified Financial Planner™ with Morgan Stanley and NAWBO Virtual member
While women are a powerful economic force in the world, there is no doubt about it: Women face a unique set of financial challenges. Some of these challenges include:
- The day-to-day priorities, including taking care of the home, children and aging parents, come first over retirement.
- There is still a gender pay gap that has not been closed.
- Women have a higher life expectancy and therefore, need their money to last longer.
- Women are sometimes more conservative with money, which means it may take longer for their money to grow.
- Women often leave big financial decisions to someone else, and in doing so, may lack the financial confidence to make decisions on their own when the time comes.
While these challenges seem daunting, there are things women can do today to face them head on. Here are steps I recommend women take, to help build financial confidence and become financially prepared for life’s next transition.
1. Evaluate Your Situation
✔ Review your credit history report.
✔ Review your insurance coverage with a financial professional to get a better understanding of your coverage and also to identify if there are any discounts available or any changes that need to be made.
✔ Review your emergency fund. Is it adequate and in funds that are safe and liquid?
2. Get Organized
✔ A well-ordered financial house allows you to access documents when you need them, to manage your wealth effectively and to prepare for the unexpected. Taking an inventory of your critical documents can help you get a clearer picture of what you own, what you owe and how well you can manage against certain risks.
3. Know your Numbers
✔ Do you know your net worth and monthly cash flow? Without knowing where you are, it is hard to know where you are going. If you’re close to retirement, I recommend looking at your income and expenses now and determining how they would change in retirement.
4. Bring in a Professional
✔ Hiring a financial advisor can help you maximize your retirement nest egg. A good financial advisor will take the time to clearly explain complex concepts and strategies, will speak in plain English and will have their eye on your goals, rather than your transactions. The key is to find someone you trust who communicates clearly and is both open and responsive to your concerns.
5. Define Your Goals and Plan for Your Future
✔ Consider your life goals and what you value the most. What is your why? Why do you work so hard each day? What is the desired outcome? What do you want your money to do for you? Identifying your priorities enables you, along with your financial advisor, to develop a long-term financial strategy that aligns your values and helps you achieve your objectives.
While these tips can take time, focus on one or two that you feel most comfortable with first.
And more importantly, know that with practice, everything can be improved.
You’ve got this!
About the Author…
As a Financial Advisor at Morgan Stanley, Elizabeth provides financial planning and investment management services to individuals and families across the US. She joined Morgan Stanley after 12 years as a CPA serving corporations, to be an advocate for her clients and to serve those seeking financial guidance. Learn more here.
The views expressed herein are those of the author and do not necessarily reflect the views of Morgan Stanley Wealth Management or its affiliates. All opinions are subject to change without notice. Neither the information provided nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Past performance is no guarantee of future results.
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