The demographics of women have changed rapidly over the last half-century. Women are now a prominent component of the corporate world and the global business landscape. More women are also taking stewardship of family and business finances. Long gone are the days of husbands doing all the financial planning and investing.
Women are often intuitive, thoughtful and compassionate, and can use these qualities to their advantage as they plan for their financial future. In doing so, here are some things to be mindful of:
1. Let go of baggage
We all make financial blunders―it is part of being human. A dodgy business deal gone askew or personal mistake such as paying a late fee on credit card can happen. But sometimes women take such mistakes as evidence that they are incompetent when it comes to financial management. Nothing could be further from the truth. Think of each day as a new beginning. Nothing is permanent or beyond correction.
2. Take money lessons to heart
Women need to understand where their attitudes and habits about finances come from, and where necessary, write another story. For example, as a young girl you may have watched your father gamble money away or spend foolishly as your mom remained quiet. This could be an inspiration for you to be more assertive in matters of the wallet.
3. Recognize your needs and motivations
Money is a major motivational factor. Some people view it as a sign of status or defining success. To be mindful, women need to understand what motivates them to both spend and save money. Be realistic about your needs and wants, and identify and prioritize your financial goals.
4. Don’t lose sight of what you value
The financial choices we make determine what’s important. Buying the latest designer bag for example, may sound like fun, but take a step back and think about how you want the future to look. Will making this purchase place your financial independence or retirement savings at risk?
5. Consider how others may impact your finances
Women often put others’ needs ahead of their own. For example, a friend of my family is a 68-year-old widow who recently lost her husband to ALS, and is currently caring for her 99-year-old father. She also raised four children―which means that her work history may be shorter due to family responsibilities. This, in turn, has likely impacted her retirement savings and the amount of her CPP benefits. Think about the details of your own situation and how it might affect your financial planning, now and in the future.
6. Don’t ignore risk
Market risk describes the fluctuations in security prices as a result of market activity and expectations. But market risk is not the only factor that can affect your balance sheet or financial well-being. Because women have longer life expectancies and often lower retirement account balances than men, they also need to consider inflation risk and longevity risk as part of their overall financial plan.
Mindfulness can help everyone—especially women—take control of their finances and plan for financial and emotional well-being.
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For more on women and money, watch Women and financial self-confidence and Build your money confidence and read Women most likely to lose sleep over money worries.