Joy Thomas, Contributor
TODAY'S WOMAN has definitely come into her own, carrying with her economic power and the will and the drive to live an enlightened, independent and fulfilling life. The majority of women today are work force participants, some because they want to, but most because they have to. Even though most are concentrated in low paying, low skilled jobs, there is a solid cadre of educated and empowered women, who think about their financial well-being.
As they focus on financial independence, women face a slew of issues, from budgeting to investing to retirement planning. But it has been suggested that by their very nature, women are more intimidated by financial issues than men are for many reasons, but what ever the reason, women must face monetary issues with full frontal honesty and inspired vision.
Don't spend today at the expense of tomorrow's security.
Some women enjoy the kind of life that many wish for. Most of their personal goals have been taken care of, in one way or the other, e.g. a well paying and secure job, excellent health benefits and credit cards, all supplemented by a very generous partner. Some women will spend like there is no tomorrow. They will 'shop until they drop', because once they see it, they want it, and then they buy it.
HEFTY CREDIT CARD DEBT
The result is usually hefty credit card debt and stifled investments. Whenever a woman gets to that point, she becomes "financially destructive". By not identifying meaningful financial goals, she lives in a retail 'wonderland', aimlessly spending more than she earns. She definitely needs to give herself a 'financial check' and start by asking the following three questions:
Where would she like to be in (10-20) years?
What are the things that she values most?
Can she set an age for retirement and realise it?
By envisioning the bigger picture, she will see that a house and a car are not the only requirements for a fulfilled life. Long-term goals may also include acquiring real estate, investing for her children's education, becoming the owner of her own business and maybe even early retirement.
UNDERSTANDING SPENDING HABITS
She should start by having a definitive understanding of her spending habits. To do this, she should log every purchase for 30 days. Seeing it all on paper is usually enough to shock a woman to reality, as well as it may lead her to question her reasons for this frivolous spending.
CANCEL SOME CREDIT CARDS
She needs to cancel some of those credit cards, leaving 1 or maybe 2 (depending on family size and her limits) for emergencies. This is very extreme advice, but depending heavily on credit cards may lead to the loss of a sense of value for money. Delayed payment also gives a false sense of spending confidence, resulting in unchecked consumption. And by the way ladies, new shoes (no matter how cute) are not considered an emergency!
By paying off the debt before it is due, she can benefit from interest savings. Start by paying off the smallest amounts, it may make just a dent, but that will give her the drive to continue.
Review insurance policies, assess the investment portion of the policy, in relation to realistic goals and inflation. She should check to ensure that the policy allows her to save towards education. She needs to demand straight talk from the agent and by all means to shop around.
How will she prepare for the unexpected?
She should consider the investment goals set for herself and her family and talk to a financial advisor, who will give sound advice on how to invest the cash needed for this purpose, whether it is long-term or short term. Equities are the best way to start developing a portfolio for these goals. Every effort should be made by her to boost her nest egg with a lump sum. If a salary increase is received, she should put it directly into a retirement fund.
For those women who are serious about a secure financial future, take these points into consideration, and most importantly, start early. Think about making a critical assessment of "must-have" versus "nice-to-have", as you will be surprised to see how much you can save.
Making the decision to cut spending in order to save can be a very tough one, especially for single parents, but do not wait until a crisis situation arises, before starting to ponder your fate. Life can throw some hard knocks at us and unless we begin to focus early on what lies ahead for ourselves and family, we might not be able to face upcoming challenges.
Joy Thomas is the assistant branch manager at DB&G's Savanna-la-Mar branch. To further discuss investing and the many options we have available, contact her at info@mydbg.com or toll free at 1-888-CALL DBG.
Taken from The Sunday Gleaner, April 24, 2005
