As a financial advisor, I can say without hesitation that in 60 percent of my meetings, the person sitting on the other side of the table is a man. I can also state, with confidence, that it’s not because men are “better at finances.”
I don’t know where this falsehood was born, but I do know it’s perpetuated by both men and women. Sure, there are some chauvinists out there who think their sisters or wives aren’t smart enough to understand. However, there are also a lot of great guys who tell me they beg the women in their lives to get involved.
The biggest obstacle I hear from women is apprehension about looking foolish. “I’m not good at math” or “I have no interest” are the most common responses to my inquiries. “That’s my husband’s job” is a familiar refrain for married women. I want to encourage them, and you, to be more fluent in the language of monetary affairs.
It’s mission-critical for women to have a handle on what I would consider to be the basics. I’m not asking anyone to find finance and investing as interesting as I do, but the decisions that are made today will affect your life tomorrow. If nothing else, your future interests you, right?
Married women out there may be wondering why it’s so important to grasp a glut of information that their husbands already handle. The answer is simple—no one has a crystal ball. Life can take us by surprise. Unfortunately, divorce happens. Unexpected deaths occur. No one wants to consider these distressing scenarios. Believe me, it’s better to be prepared just in case. If you can arm yourself with as much knowledge as possible about your balance sheet, the fear of the unknown will not be as paralyzing.
Curcio’s Big Three
These are the three broad stages of finance that, in my opinion, every woman should have some understanding of: Today’s Finances, Tomorrow’s Finances, Tactical Finances. There’s no need to be an expert on any specific item, but a general understanding of each relevant topic is critical to the overall picture.
1. Today’s Finances: This category deals with a general understanding of your day-to day- finances. Do you know your household’s combined annual income as well as annual expenses? Where do you have checking/savings accounts, and do you have the logins for those accounts? Does your household have outstanding debt like a mortgage, credit card debt, car notes, etc.? This category also includes insurance like medical, automobile, and home.
2. Tomorrow’s Finances: It’s important to understand this category as you continue to plan or if you are in retirement. Are you familiar with your investment accounts or any outside business interests? This includes brokerage accounts, IRA’s, Roths, 401(k)’s, 529 plans for children, annuities, pension plans, etc. Do you know when you will take Social Security and how much that annual amount is?
3. Tactical Finances: This category rolls up the previous two and ensures you are thinking about planning for or navigating a happy retirement and what your financial situation may mean when you are no longer here. Do you know if your investment accounts and other streams of income like Social Security and pension plans provide enough annual income to cover your annual expenses? Did you or your spouse purchase long-term healthcare plans/insurance? Do you have an estate plan set up, or do you have any wills/trusts? Can your accounts/assets be passed along to your beneficiaries in a tax-advantaged manner?
As you can see, there are some questions to tackle for each financial stage. I suggest tackling this list in bite-size pieces. Don’t let yourself become overwhelmed. Rome wasn’t built in a day. Your financial prowess won’t be either. Don’t put that pressure on yourself. Take your time and go at your own pace.
Financial Planning and Retirement
Now that we have the basics out of the way, it’s time to discuss the nuts and bolts of financial planning and retirement. I wholly advise every married woman to sit down with her spouse to discuss long-term financial and retirement plans and to ensure that you’re on the same page.
The first question is, do you have a plan? If so, have you decided together on the objectives of your money? We all know it can be a sensitive subject, even (and maybe especially!) between husband and wife. Therefore, it’s very important to have an open line of communication with one another. If you find your goals are distinctly different, now is the best time to discuss the disparity and reach common ground moving forward.
A large part of your financial plan involves investing. Whether you have a financial advisor or manage your own money, it’s important to understand how and where you are invested. Make sure the strategy fits your goals and risk tolerance. Knowing the answers to these questions will help you get there.
1. Do you have a financial advisor, and do you know how to contact her/him in an emergency? Do you know how to access your money in case of an emergency and has that plan been communicated to you?
2. Are you familiar with your financial plan and how that fits into your financial goals and risk tolerance? This normally comes from knowing if you are focused on growth and/or income.
3. If you are getting close to retirement or in retirement, do you know how much you need for spending each year, and do you know how much money you need for retirement? It is often helpful to understand how much Social Security you will get and when to take it.
If you and your spouse have a financial planner, I highly recommend accompanying your husband to every appointment. I know so many women who cringe at the thought of asking the “wrong” question. Let me put that fear to rest. Any question you have about YOUR money is the right question. Your advisor will welcome the chance to give you the information you need. Every moment you take to learn is an opportunity to grow.
I care about and counsel women in many different walks of life. The best advice I can give to all of them is to take an active role. For married women, I find husbands often take great delight in the fact that their wife wants to know and understand the overall financial picture. It kills me to see a husband walk through the door solo when I know our discussion will end up impacting his wife.
No matter what your life looks like, whether you are married or single, it’s critical to have enough basic knowledge of your financial picture to ensure the happy retirement you deserve.
This information is provided to you as a resource for informational purposes only and is not to be viewed as investment advice or recommendations. This information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax, or investment advisor before making any investment/tax/estate/financial planning considerations or decisions. The views and opinions expressed are for educational purposes only as of the date of production/writing and may change without notice at any time based on numerous factors, such as market or other conditions.