Posts in Marriage and Finances

Women and Investing: Facts, Myths, and Financial Self-Care

August 11th, 2016 Posted by Budgeting, Family Finances, Investment Strategy, Investor Behavior, Life Planning, Marriage and Finances, Retirement Planning 0 thoughts on “Women and Investing: Facts, Myths, and Financial Self-Care”

Women control $5 trillion in investable assets in the United States, and the potential for future growth is enormous. Today, women represent more than 51 percent of the workforce and are starting businesses at twice the rate of men. On the flip side, men’s retirement account balances average more than 50 percent higher than women’s. The gender retirement gap is further compounded by the fact that women tend to live an estimated five to six years longer than men.

The data shows that, on their own, many older women have less money saved to draw from, as well as higher expenses. All too often, this dangerous combination results in financial insecurity. It’s imperative to understand why this gender retirement gap exists, and what can be done about it.

  • The Gender Pay Gap: Statistically, for every dollar men take home, women earn 79¢. That means women will make an estimated $530,000 less over their lifetimes, thus also reducing the amount of money they have to invest. We need to address this inequity as a society, but in the meantime, women in the workforce should not shy away from asking for a raise.
  • Family Responsibility: Many women take more time off work than their male counterparts to raise children or care for elderly parents. Not working outside the home means more than just losing a paycheck. It also means having less disposable income to invest in the long term and may translate into lower Social Security benefits.
  • Cost of Living: Life as a woman actually costs more. For starters, think wardrobe and personal care. And while there may be little we can do to reduce some of these costs, there are still ways to combat this problem. For instance, women often end up paying more for items such as mortgages and cars. By vigilantly researching the best loan rates available, women can negotiate from a stronger position and potentially reduce excessive costs over a lifetime.
  • The Gender Investment Gap: Although women actually save more of their disposable income than men, they tend to invest less of it, leaving a lot of their money in cash or low-yield savings accounts. But when women put together personal plans to bridge the gender investment gap, it can have dramatic, positive consequences for their financial lives. Before we explore ways to move forward in a positive direction, let’s talk about why women often show hesitancy when investing. It’s likely that they’re buying into one or more of the many myths about women and money.

Negative stereotypes and myths about women and finance:

  • Men are better investors than women. Not so. Research shows that when women invest, they tend to be highly successful, outperforming men. Not to mention that funds managed by women consistently outperform their alternatives.
  • Women are too risk averse to invest successfully. True, many women are risk averse. But wait. Can’t caution in investing actually be a virtue that helps you better weigh your options and avoid making poor or rash decisions? Yes – so long as you keep in mind that some risk must be taken in order to realize the returns needed to grow your wealth. This shouldn’t present a problem for women, or any investors, when the connection between their values, goals, financial plan and investments is clear and all are in alignment.
  • Women don’t have enough financial education to make a financial plan. Although this myth represents a gross generalization, there’s no denying that everyone could benefit from getting a better financial education. Not having one, however, has never stopped men from investing.

Moving ahead with saving and investing as a form of self-care:

  • Budget: Try to think of budgeting as less about numbers and more about personal awareness. It’s a check-in to see whether you are spending on the things that matter to you most. Set boundaries that ultimately will set you free to create and pursue the life you desire.
  • Save: Putting aside money is actually a way of caring for your future self. The rule of thumb is to save 15-20 percent of your income, but if you can’t do that, save as much as you realistically think you can. Just as you go in for regular health check-ups, do frequent check-ins on your financial well-being. Ask yourself if there isn’t more you can do to protect your financial welfare.
  • Invest: The need to invest can be compared to our need for exercise. We exercise to fight the corrosive power of aging and maintain our health. We invest to fight the corrosive power of inflation and maintain our financial health. Your savings should be invested, rather than kept in a money market fund with low interest rates. Otherwise, inflation will erode the value of your assets.
  • Insure Yourself: It’s a little-known but important statistic that 80 percent of men die married while 80 percent of women die single. Life insurance and long term care insurance should be seriously considered in women’s financial planning.
  • Take Responsibility: You would never cede big decisions in your life to other people, like who to vote for or how to take care of your kids or aging parents, so make sure that you are also participating in financial planning. It is highly likely that, someday, you will be the only one responsible anyway. A study performed by the National Center for Women and Retirement Research estimates that 90 percent of all women – single, divorced or widowed — will be in charge of financial matters at some point in their lives.

To create the best possible future for yourself, start planning for and investing in your future today. We would be happy to have an exploratory, no-obligation conversation with you. Feel free to give us a call at OpenCircle, 203-985-0448.

Talking About Finances: Women Should Initiate

March 7th, 2016 Posted by Estate Planning, Family Finances, Investor Behavior, Marriage and Finances 0 thoughts on “Talking About Finances: Women Should Initiate”

Studies of people’s financial behavior show that initiating important financial discussions is key to achieving and securing financial well-being, especially for women. Whether talking with their spouses or partners, or with their parents or children, women who take the lead in talking about sensitive financial issues are better prepared to deal with the hurdles that may occur on the pathway of life. They are also less afraid of what the future might bring.

Discussions with Spouse or Partner

Surveys reveal that a majority of women are willing to talk with their spouses or partners about issues related to aging, but many do not start the conversation. When it comes to discussing, researching, and selecting financial solutions for dealing with the possibilities of failing health or complications around mortality, less than half of women are “proactive; they are willing to be involved but unlikely to initiate the discussion. Some women, even if they know it would be prudent, will only talk about these subjects if actually pressured to do so.

Discussions with Older Parents

Many women are or will be assisting aging parents. Yet an overwhelming percentage of women have not talked in-depth with their parents about their financial needs and arrangements as they grow older. Many say that they have not done so because their parents are sensitive about financial issues. And some women truly feel that their parents’ financial affairs are” none of their business. Chances are strong, however, that many women will eventually have to deal in some way with their parents’ business matters. The better prepared they are, the easier it will be.

Discussions with Grown Children

Women also seem reluctant to have substantive financial dialogue with their grown children. With regard to their later life needs, a small number of women may have explained provisions for their retirement income or long-term care to their children. A significant number of them, however, have not discussed their will or estate plans with their offspring. Experience demonstrates the wisdom of having these conversations sooner rather than later.

The fact is that money remains a difficult topic within many families. Oftentimes, individuals, and women in particular, will wait for someone else to launch the subject, all the while losing precious time for planning. In view of that, we at OpenCircle stress the importance of women taking the lead in initiating financial conversations with their loved ones. We can help. Give us a call at 203-985-0448.

Family Wealth Planning Conversations

February 22nd, 2016 Posted by Budgeting, College Planning, Estate Planning, Family Finances, Homes and Mortgages, Life Planning, Loans and Debt, Marriage and Finances, Retirement Planning, Saving 0 thoughts on “Family Wealth Planning Conversations”

What Are Family Wealth Planning Conversations (And Why Have Them)?

Whether gathering for annual reunions, sharing childhood memories, or simply being there for one another during difficult times, family traditions nourish our most satisfying relationships. An important tradition that we at OpenCircle foster with our clients focuses on family wealth planning. We facilitate conversations that engage every family member, each of them contributing their talents and interests to achieving their collective and personal lifetime goals.

That does not mean that everyone must participate equally. As we work with families, one individual often emerges as the spokesperson or steward for the group. That’s fine … if the role is based on a mutual and deliberately planned arrangement. If it is instead based on unspoken assumptions or force of habit, a family’s wealth planning may benefit from a fresh conversation.

Even if a family is in full agreement on who is best suited to champion its interests, there’s always life’s many “what ifs.” Are others in the family adequately prepared to assume the stewardship role when and if it is required of them? Might they have unexpressed questions or concerns that are best addressed well before that day may arrive? Carving out time to hold candid conversations is where it all begins.

How We Guide Our Clients in Family Conversations

To launch a family wealth planning conversation with a client, we invite them and their family to meet with us at their convenience. (A face-to-face meeting is optimal, but we can harness technology to hold a meeting online if necessary.) We guide them in exploring key considerations such as:

  • How would each of them define their roles in their family’s wealth planning?
  • Are all of them satisfied with their current roles?
  • Do all family members have the essential information, should they be required to increase their participation? (For example, do they know how to reach us?)
  • Are there other questions, suggestions or family wealth dynamics they would like to explore, either immediately or over time?
  • How can we best assist each of them in these and other areas?

We help families find broader and deeper perspective in this area of their lives. Even though specific family members may never have joined us in prior meetings, we encourage them to be included at this time. They may well discover insights about one another that could strengthen both their financial conversations as well as their overall family dynamics.

Regardless of who may be “in charge” of a family’s wealth, every individual is equally dependent on the outcome of the efforts. Enabling a forum for everyone’s voice to be heard is another way OpenCircle helps our clients achieve their greatest life goals, keeping their family’s wealth fresh and meaningful over time. If you would like more information, please give us a call at 203-985-0448.

[Photo credit: Flickr user Luke Lehrfeld]

The Realities of Being Wonder Woman

February 15th, 2016 Posted by Family Finances, Generational Financial Planning, Investor Behavior, Jobs, Careers and Benefits, Life Planning, Loans and Debt, Marriage and Finances, Retirement Planning, Saving 0 thoughts on “The Realities of Being Wonder Woman”

Wonder Woman is 75! No, that’s not her age in comic books, but it is how many years have passed since her character was created in 1941. Her “diamond” anniversary has sparked renewed interest in this unusual heroine and reminded many of us about her accomplishments. From the days of World War II through the present, she has confronted and beaten many of the challenges that real women face. She has served as a role model and a trendsetter; she has emulated and fostered that we-can-do-it attitude. She is also a reflection of the world around us.

We see regular reports about the progress women have made in recent times. They are better educated than ever before, with more women than men currently in college. There are more women than men in the workforce. Many more women are the primary breadwinners for their families than in the past. They are leaders in many professional fields and have made great strides in the business world.

With all this progress, however, women must still cope with difficult odds. While the gap is slowly narrowing, women continue to earn less money than men for equal work. While men are taking on more responsibilities in the home, women still shoulder more than their share of childcare and housework. They often end up with the bulk of caregiving for aging parents and other family members in need. And they continue to confront invisible barriers in the scientific and corporate worlds. The demands on their personal time can be overwhelming and the rewards of paid employment may be less than satisfying.

As if all this weren’t challenging enough, many women worry about having no one to care for them in their later years. They also worry about having a financial safety net that will withstand the unexpected. Concern about the cost of healthcare adds to overall anxiety levels.

Many women know that they need to do something about financial planning. They may feel, however, that they do not have the time to deal with it, adding to the emotional stress of their daily lives. They may believe that they should find professional advice, but may not know where to turn. While women as a group are becoming increasingly educated and informed about financial matters, they may not feel comfortable asking for help. At times like this, they do not feel very much like Wonder Woman.

The demands of 21st century life do not show any signs of diminishing. And as women are controlling more and more of the world’s personal wealth, the need for each of them to create and implement a solid plan for financial management is growing stronger. They need to find a way to do it that helps relieve stress, rather than adding to it.

At OpenCircle Wealth Partners, we can help. We have years of experience assisting women with the particular issues they face. We take great satisfaction in helping them find their way through the financial jungle to a place where they feel more in charge of their lives – to a place where they feel more like the Wonder Women they really are. Please give us a call at 203-985-0448 for a free, no-obligation, consultation. We look forward to hearing from you.

[Photo Credit: Paolo Rivera]

Surviving Divorce Without Going Broke

September 10th, 2015 Posted by Budgeting, Family Finances, Homes and Mortgages, Jobs, Careers and Benefits, Marriage and Finances 0 thoughts on “Surviving Divorce Without Going Broke”

Many of my clients are happily single or married, but a good number of them are not so fortunate. It’s a fact of life in today’s world that many people are divorced or wish they were. Making the decision to end a marriage is never easy. When you add the issues around money, it is even more difficult. And the emotional stress can seriously cloud your thinking.

If you are considering divorce, you should try to understand what it will cost you, not just emotionally, but financially. If you are experienced in money matters, you may have a good sense of how to proceed. On the other hand, you may not have any financial background and do not even know where to begin. The best way to start is with some questions.

Here are some of the financial questions to think about before you make the final decision to file for divorce:

  • Do I have an independent source of income?
  • Do I have assets of my own that I need to protect before I file for divorce?
  • Will I need to request/provide alimony or child support?
  • Do I have a good sense of what my spouse may request?
  • Do my spouse and I have assets that are shared jointly?
  • Can we split the assets as they are, or do we need to sell them first?
  • Will there be expenses or other consequences as a result of splitting our assets?
  • Can I afford a divorce lawyer?
  • Should I consult a financial advisor?

Even if you think you have a good grasp of the issues involved with divorce, things can get fairly complicated, and some things can take you by surprise. You might be able to find answers by doing research on your own, or it may seem overwhelming. This could be the most important time in your life to turn to a financial advisor for advice.

If you are already in the middle of a divorce, and do not have answers to the important questions, it is not necessarily too late.  Nothing is final until you sign your settlement in court. And even if you have answers, new questions will very likely come to the surface.  Keep your head on your shoulders as best you can, and try to avoid making decisions based on your feelings. If necessary, ask someone you trust to help you make decisions. You do not need to “cast your fate to the wind” and give up.

What if you are already divorced? Perhaps your financial house is not in order, or maybe the picture is so bleak you are not sure how you are going to make ends meet. Do not despair. There is no time like the present to assess your situation and create a plan for moving forward. You may have to downsize or tighten your belt until you can get your head above water and start rebuilding your life. You may need a plan for your retirement that takes into account that you will be on your own. Whatever your challenges, there is a rational way to handle them. You may need to live your life one day at a time, but how you deal with your money should be part of a long term vision.