International Women’s Day: Let’s Talk Money
Certain people in the money management industry benefit from making finances look too complicated for anyone who isn’t “numbers-oriented.” They’re the ones who just want you to hand your money over to them and let them do what they want.
Fortunately, that’s not how money management has to work. And it’s increasingly important, especially for women, that it doesn’t work that way.
You need to know how to handle your finances yourself. No matter whether you’re currently single, married, divorced, or widowed. It’s a critical part of modern life. If there’s someone else in your household who deals with the money now, what happens when they’re no longer in the picture or become incapacitated?
Maybe you’ve recently come into money, through an inheritance or divorce proceedings, and you want to make sure it lasts. You might be wondering how you can create a savings plan so you have a solid nest egg when it’s time to retire.
No one is born knowing how to handle their cash and everyone who seems to know what they’re doing have had to learn it. And so can you.
Truthbomb #1: You and Your Finances SHOULD Come First
The Social Security Administration is increasing cost of living adjustment (COLA) payments by 8.7% in 2023 to move with current inflation. Even if you’re not collecting social security right now that cost of living increase does effect your future benefits. For example, the 2022 full retirement age maximum benefit was $3345 it jumped to $3627 for 2023. For those collecting at 67, who live to the age of 90 their collecting an extra $82,000 during their retirement.
Truthbomb #2: Money Management Is a Skill, Not an Inherited Trait
If you really wanted to, you could go down the rabbit hole and learn about all kinds of unconventional strategies that the “financial people” use for their money, like alternative investments that are so alternative hardly anyone will touch them. Or spend the rest of your life finding the thickest investment books you can find and reading through them.
But you don’t have time for all that, and it’s not necessary. Money management doesn’t actually have to be all that complicated, though having a little help can shorten the learning curve even more. There are plenty of lower-effort, yet tried-and-true, techniques that will help you create a solid financial footing for yourself and your family.
You need to know four basics when it comes to money: what’s coming in (income), what’s going out (expenses), how much you own (assets), and how much you owe (debt). The bigger the gap between income and expenses means more savings, which can then either pay off debt or be invested for the future.
Maybe you need a little help (and that’s okay!) coming up with a strategy to increase income and/or decrease expenses. You might also benefit from some guidance on what to invest in (assets) and which debt, if you have any, to pay off faster.
Truthbomb #3: “Tend and Befriend” Your Money
You’ve probably heard of the “fight-or-flight” reaction to a perceived threat. It’s why so many people feel their heart race when they’re about to give a presentation to a huge room.
Having connections to talk with about your money can be critical to building up your savings. Seeking out people who are experienced with money can help you speed up the financial learning curve.
Partnering with a knowledgeable person will also help strengthen your confidence that you can take on money management. You might know a friend who’s good with finances, or you might want to seek out a professional who demonstrates in your first get-to-know-each-other meeting that they are listening to you and your concerns.
It’s also important to make sure that your partner in money knowledge can adapt to your particular circumstances. Some people only know how to handle their own finances, with their specific lifestyle. Others take a cookie-cutter approach to money.
You need someone who can guide and advise you, without necessarily taking over completely. Someone who can listen to your fears and concerns as well, without dismissing or ignoring them.
Fairy Tale #1: It’s Better to Defer Money Management to the Men
Have you ever been in a conversation about money or finances and men around you are taking up all the air in the room?
Did you find yourself shrinking back or stepping away to avoid the hot air? Were you pretty sure a lot of it was wrong but you didn’t know (or want) to interject with truth?
In the past, you might have been made to feel like you weren’t capable of understanding what was going on. Or if you were even able to voice your concerns, they were ignored and steamrolled over.
Your voice deserves to be heard and recognized when it comes to your money.
You need a solution that puts your views and priorities front and center, whether or not they’re the same priorities as anyone else’s. Once you’re able to clear away the clouds, you can get clarity on what your own financial goals are. And create a roadmap to achieve them.
Fairy Tale #2: You Can Be Creative or Good With Numbers, But Not Both
Left brain, right brain? You’ve probably heard that left-brained people are good with numbers and logic, and right-brained people are creative and spontaneous. The left brain/right brain myth may be popular, but science shows that it’s not actually true.
You probably already know people in your life who are good at numbers and have a creative side too. Many financial professionals enjoy writing and creating a lot of written content when they’re not working on plans. Mathematicians often play musical instruments or paint.
If you’re still convinced that you’ll never be good at numbers, the good news is that you don’t really have to be. There are apps to help you track your spending. Other software is available to help you decide whether your savings rate is on track to meet your financial goals and what investments are appropriate for your risk tolerance.
And if you don’t want to deal with tech or programs, there are professionals who will respect that you’re in the driver’s seat, but help you navigate the numbers so you don’t go off course.
Flex Your Money Muscles and Fall in Love With Your Financial Power
As the old truth goes, the best year to plant a tree was 20 years ago. The second best time is now. That goes for planting trees, building muscle… and yes, managing your money. You might not have planted your money tree until today, but you can start now.
It’s critical for women to get in the driver’s seat of their own financial strategy. There will be periods in your life where you probably won’t have someone else to rely on. Knowing the basics helps you determine who you can trust if you decide to get some advice.
You don’t have to let others take up all the air in the room, or let someone else’s money come before your own. Money isn’t something only men can handle. It’s just a tool for you to be able to have the life you want, both now and in the future.
While modern marketing may make managing money seem difficult or too complex, especially for creative people, you can take the control of your funds back. Build a better relationship with your cash.
But the time to act is now. The sooner you embark on your own financial journey, the sooner you can take control and lead the life that you want. Once you’ve got the basics under your belt, your financial skills will blossom and you’ll have a relationship with money that makes you feel powerful and in control.
Teamwork makes the dream work, as they say, and collaborating with financial pros can help you take control back that much faster. But you’ll need a team of people who listen to your specific concerns and issues to build a financial strategy that works for you and your family.
Our team has experience in the issues that women in particular face, especially the financial challenges that can result from outliving your spouse, gender pay gaps, stepping away from the workforce and many more. We have a wealth of knowledge and experience that we can deploy on your behalf to make sure you are comfortable and confident in your financial plan.
Don’t ever hesitate to reach out.
Breakwater Team
At Breakwater Capital, we work with families across the United States, providing each client with a personalized experience tailored to their current circumstances, future goals, and timelines.
