The financial health of women is a topic I’m passionate about and, after working in the financial planning industry for more than a decade, I want to share a few things I’ve learnt. The one message I have for women when it comes to finance is this: start planning for the future now.
I have worked with hundreds of women from a range of backgrounds, ages, professions and life stages but they all have one thing in common: the more they understand about their financial position the better they feel about it.
It’s not about the amount of money you have but knowing where it goes and what you’re working towards. I’ve certainly had to tell people some hard truths – like the fact they may not be able to retire as soon as they’d like – but once we work out a plan to move forward, they feel more in control. Even if the first step is to simply record what you spend each day, it’s a step in the right direction.
For most women, talking about money isn’t just a discussion about their finances – it’s about their whole life and how money fits into that picture. Their relationships, children, sense of security, health concerns are all relevant factors that come into the discussion. As a financial planner, I don’t just ask about my clients’ super balance or savings plan – I try to get to the heart of their ‘life story’.
Once you start to understand your financial situation, you can plan and move forward.
The most common trap people fall into is simply spending everything they earn, without really considering where they could set some aside for savings or investment, and without actually knowing where the money has been spent.
While everyone’s financial situation is unique, there are some core things that all clients have in common:
- It’s never too late to take action: It doesn’t matter what you’ve done or haven’t done – you can always assess your financial situation and find a way to improve it.
- It’s never too early to take action: Early in my career, I was advised to set up a share fund and put a small amount away each month – an amount that I didn’t even notice. That’s now grown to be a substantial amount that I know is there if I need it. The earlier you start, the easier it is.
- Face your fears to move forward – Everyone has some fears about their finances – not having enough money, not knowing how long it will last – whatever the issue, they always feel better after they have faced that fear and put a plan in place to make changes. And usually, the situation isn’t as bad as they thought.
- Education is empowering – Everyone can learn more about their money – I’ve worked with finance professionals who have learned more than they expected during the planning process. And once you have that knowledge, you feel much more in control.