Time for Women to Take Control of Their Financial Futures

One of the scariest things I’ve ever heard my fellow moms say is, “I don’t know how much we have in savings/what our bills are/how much we owe – my husband takes care of all that.”

Now, I’m no financial guru. In fact, I believe if I came face-to-face with Dave Ramsey in a dark alley, he would beat me senseless with a checkbook. But when it comes right down to it – because marriage isn’t all sunshine and sausages, we as women have to be the CEO (or co-CEO) of the business that is our family. The problem is many of us just aren’t sure how to get there.

In a recent Wall Street Journal article, only 26% of women surveyed were confident in their investment decisions compared to 44% of men. In addition, MP Dunleavey of DailyWorth.com (one of my favorite sites) reported to NY1 that nearly 30% of women don’t know what their main source of retirement income will be.

To help women better understand finances, Rung in St. Louis, which bolsters the confidence of professional women in the business world, is hosting A Woman’s Guide to Money Matters, led by Donna Parrone, a financial advisor with Edward Jones, at its boutique on May 26. For a bit of insight into the event, I asked Parrone for answers to three questions in regards to a woman’s financial planning.

1. What is the biggest financial concern that you hear from parents?

That would have to be education costs. How much will college cost and how can they save for that day. The answer is that college costs are increasing every year; I know my own daughter racked up $60,000 in student loans before graduating three years ago, and fully half her tuition was covered in scholarships and grants. There are several different investment vehicles available to parents for college saving, and they need to explore the options to see which is best for their situation.

2. What is the single biggest mistake women make in regards to finances?

While I am seeing more and more women taking interest in their family finances, there are still too many who choose not to be involved. Ninety percent of women will be solely responsible for their finances at some point due to divorce and longer life expectancies. My goal is to educate women about finances as early as possible so they can make informed decisions if and when the time comes or if they choose to remain single.

And of course, the biggest mistake we all make is to put off saving for too long. I meet many young people who think their early twenties is much too soon to worry about retirement or children's education costs, but even a little bit put away monthly through their twenties, and invested wisely, can become quite the nest egg when they need it. It is always much harder to play "catch-up" in your forties and fifties. We are our own most important asset, in the same way we take the time and money to keep our houses in shape, we should take the same care to invest in ourselves and our future.

3. Many mothers, because of divorce, layoff, etc., are starting from square one in regards to saving for the future. What are two to three simple things they can do to get started on the right path?

One - find a financial advisor whom you like and trust - ask your friends and family who they use and "interview" several before committing to the relationship. At Edward Jones, we go into our communities and meet people face to face so clients have the opportunity to get to know us before we start doing business together. This is an important relationship that shouldn't be left to chance.

Two - invest in quality products and diversify.  Diversification does not guarantee a profit or protect against loss and it may seem like a simple rule, but there is an art to it. Here at Edward Jones we have analysts who research and bring that quality and diversity to the table. It allows me to feel very confident about the products I offer my clients. I also have wonderful tools to make sure my clients stay diversified and to make sure the products I offer fit with their comfort level and risk tolerance.

Three - even if it is just $50 or $100 a month that you can afford to put away, do it. Start now and don't miss a month. Create a monthly budget and make investing in yourself as equally important as the rent and the electric. Some people feel they need large amounts of money to start investing, but smaller, monthly contributions to your account can really add up over time. 

Automatically investing each month does not ensure a profit nor does it protect against loss in declining markets and such a plan involves continual investment in securities regardless of fluctuating prices.  It is important to consider your financial ability to continue the purchases through periods of low price levels before beginning such a program.

For more information, join other women at A Woman’s Guide to Money Matters on Thursday, May 26 from 5 p.m. to 7 p.m. at Rung, 9739 Manchester. To RSVP, contact Parrone at 314-781-5522.

By Nicole Plegge, Lifestyle Blogger for SmartParenting