After many years in financial services – a business still highly dominated by men – it’s become clear to me that many financial advisors do a disservice to women. They make assumptions, for instance, that women are uninterested in finance – or worse, that they are uneducated about money matters. In my own experience, my female clients are serious about understanding how to make their money work best for them and how it can bring them success in reaching both financial and life goals.
While there’s no such thing as a one-size-fits-all financial plan for women, I have found that successful female executives can benefit from using the tips below – and from avoiding common traps, too.
Trap: Making Incorrect Career Assumptions
If your financial plan assumes a steadily growing income stream all the way to retirement, it’s time to reevaluate. While this sort of financial plan often serves men quite well, professional women are much more likely to have gaps in their employment. In fact, professional women are statistically much more likely than men to take on responsibilities like childcare or elder care, and leaving the workforce for just five years can reduce lifetime earning potential by as much as 20 percent. This is why it’s crucial for professional women to create a financial plan that takes this likelihood into account and plans for years of less-than-peak earning capacity.
Tip: Ask More Questions
Men and women approach finances in different ways, but it’s often women who fail to ask questions for fear of looking uneducated or ill-informed – or simply because many people still feel money is a taboo or uncomfortable subject. If you’re an executive woman with any questions at all about aspects of your financial plan or investment strategy, ask your financial advisor without hesitation. When it comes to the topic of your money – which impacts your family and your future – don’t leave questions unasked. If you happen to receive an unsatisfying response, it’s a good sign that you haven’t found the right financial advisor for you.
Trap: Failing to Focus on the Goal
Money is highly tied to emotions, both for men and women, but women often get caught up in how their financial decisions will impact the other people in their lives. This can make it difficult to have the clarity of focus you need to meet specific financial goals and priorities. In other words, when you try to balance the needs of all the important people in your life, you do so at a cost to yourself. Since women are more likely than men to balance professional careers and childrearing, for example, their instincts to take care of everyone else first often means sacrificing their own financial wellbeing. If you find yourself caught in this habit, remember that taking care of your own finances is a service to your children. At a minimum, making your financial security a priority means your kids won’t have to face the financial or emotional turmoil of taking care of you in your later years.
Tip: Maintain Strong Budgeting and Saving Habits
If you’re an executive woman, you know you’re doing a balancing act every day as you strive to succeed at work and in your personal life. Emotional or thoughtless spending can become a habit when you’re busy and stressed – and quickly derail your savings plans. You can help to counteract your tendency to splurge by getting into the habit of building and maintaining strong budgeting and saving habits. I recommend Mint.com because it offers free tools to help you see exactly where your money is going and where you can find extra dollars to invest or save in support of your long-term goals. The point here is that a stellar financial plan will only take you so far if you fail to implement the habits needed to make it successful, so get your strategies in place and then stick to them.
Develop a Financial Plan that Serves Your Unique Needs
When you take into account the male-dominated financial services industry, common incorrect planning assumptions, and goals that are easily derailed by family priorities, female executives face an uphill battle. Finding a financial advisor who understands your needs, takes time to answer your questions, and helps you build and execute the right financial plan for you is crucial.
At Flourish Wealth Management, we pair your aspirations with our expertise to empower you to meet your goals. We know that the right financial plan is about more than money – it’s a reflection of what you value most and a path to personal and financial fulfillment. We are delighted to help our clients align their financial resources with their values and goals, and we would love to discuss your needs. Contact us today for a complimentary discovery call. We look forward to hearing from you!