Financial planning: What every woman should know

Today’s Voice of the Expert guest blogger is Meg Shepard, a graduate student in the University of Georgia’s Financial Planning Program. Shepard recently conducted a seminar on the Athens campus on what women can and should do to achieve their financial goals.

She says:

As women, we have all heard that on average we earn less than men, but we live longer than men. These issues create increased financial needs for women. Either we need to work more than our male counterparts, or we need to save more for retirement. The bottom line is that we need to have a plan for our money and start working toward our financial goals. However, research shows that women, on average, have less enthusiasm for money management and lower confidence in our financial management abilities than our male counterparts.

However, there is some good news. Although we are less confident and enthusiastic about financial matters than men, research shows that once we are financially educated women, on average, we are actually better money managers! The research indicates that men are more likely to be overconfident investors and trade excessively. The research shows that men are 45 percent more likely to trade more often than women, resulting in a 2.65 percent loss in return. So, women should participate in financial matters and start planning for our financial future.

In fact, we have to stop acting as if we get a free pass on our finances, and we have to start planning now while we have time. There is no time like the present to get our financial “house” in order.

Steps to getting your finances in order:

  1. Spend less than you earn!
  2. Use your network to find a Certified Financial Planner™.
  3. Create a plan for your future.
  4. Listen to your instincts.
  5. Continue to learn.

Spend less than you earn. How can such an easy phrase be so difficult? First, you need to track your expenses and find out where your money is going. Then, you need to create a spending plan and stick to it. Spending less than you earn is the first step in managing your money. You won’t be able to achieve your financial goals if you are not living within your means.

Use your network to find a Certified Financial Planner™. We all have a network! Use your network of friends and family to find a Certified Financial Planner™. Or you can search for a planner in your area from the list provided at: www.plannersearch.org. There are several online articles on how to choose a financial advisor. Most importantly, you need to find a financial planner that you can trust and someone that you can develop a relationship with.

Create a plan for your future. You are not going to be able to achieve your financial goals unless you know what your goals are. Take a few minutes right now and write down your goals. Make three lists for your short, intermediate, and long-term goals. Be sure to include the amount of money that you will need to achieve the goal and your deadline. Then, create a plan for how you will achieve your goals. Studies show that when you have a plan you are more likely to reach your goals.

Listen to your instincts. You have great instincts and you should listen to them. When an investment seems too good to be true, you are probably right. There is no easy way to make money or to achieve your goals. It will take time and commitment, but you can do it! Listen to your instincts and you will go far.

Continue to learn. We have to continue to learn. There are many excellent books and articles that will help you understand more about personal finance. Some literature is exclusively for women and focuses on women-specific issues. You can find them at your local library or on the Financial Planning Association website. On the website you will find objective advice on a range of financial issues. Or you could learn by taking a few classes at your local college or civic center. Research shows that increasing knowledge also increases confidence, which will help you to reach your goals. So continue learning and absorb the wealth of knowledge that is at your fingertips.

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