Finances: Not for Men Only
If you are a spouse, a single career woman or perhaps divorced or widowed, it's more than likely that you have little familiarity with matters of financial planning. After all, money is stuff for men to handle, right? Unfortunately, that's absolutely wrong.
I remember more than a few occasions over the years when I've met with women whose first question was "What do I do now?" In some cases, the question came from women who were successful in their chosen careers, but largely uninformed about how to handle the assets they had accumulated. In others, it came from those who were now on their own due to failed marriages or the passing of a spouse. Whichever the reason, the reality is that financial planning is not a club that's exclusive to men.
Although this is not a new suggestion, it's one that hasn't been given sufficient attention, which is why more than a few women still feel uncomfortable dealing with financial matters. There's no reason for this.
Years ago, I recall one of my closest colleagues always insisting that both spouses be involved in these kinds of discussions. That's been my rule as well. Anything less would be a disservice.
The fundamentals of handling finances are straightforward. Starting at Square One, one needs to gather basic data on assets, liabilities, income, and expenses. That's what you own, what you owe, what you earn, and what you spend. These are the key components of personal finances and for many folks the most difficult part is gathering all the information.
The road map for optimal financial planning aims for sufficient accumulation of assets over time to provide sufficient funds to maintain a desired lifestyle when income is generated only by the earnings on those assets. Sometimes there's enough put away to assure the hoped-for future and sometimes there is not. In that case, adjustments may need to be made. These adjustments include retiring later, increasing returns on investments, saving more, and spending less.
This kind of exercise could be a do-it-yourself effort, but the variables involved may well be more than one person should attempt to tackle without assistance. What's needed is rarely just a matter of tweaking your budget or investments. Indeed, the process of actually identifying expense components may be a revelation. With few exceptions, people rarely are fully aware of what they are spending.
Proper investing takes greater expertise and should always require some assistance from a competent professional. Basic concepts such as asset allocation, diversification, and selection of appropriate holdings within asset classes may be subjects that can be introduced on YouTube videos, but the thought of making decisions on such a critical subject without proper guidance is fraught with risk, one that I would not recommend. When seeking to make your own decisions, there is usually a heavy emotional overlay. By engaging a professional, productive decisions can be made without that obstacle.
The first step is the critical step: getting
started. Once you’re under way, you can
always change direction, but nothing will be accomplished until you begin. Do it today.
It’s in your very best interest.
Any questions? Please contact me at firstname.lastname@example.org
N. Russell Wayne, CFP®
Sound Asset Management Inc.
Weston, CT 06883