Women take the lead

Women are taking increasing responsibility for finances—both theirs and their family’s. Surveys by Canadian financial institutions and other organizations show that not only are women more active in financial management, they’re more confident about their financial and investment abilities.

Women are more interested in financial independence and more focused on longer-term goals such as retirement savings. A large proportion of women are active in household budgeting and are interested in managing finances and investments. Plus, there’s a growing awareness of the importance of financial management for women whose partners now hold the financial reins. Statistically, women live longer than men, and that means the time could come when those women must look after their own finances. A longer life also highlights the need for greater retirement savings.

The problem is, many women (and men) don’t have a financial plan. Without a plan that identifies needs and goals and provides a roadmap for reaching those objectives, you’re not likely to make the most of your financial life. On the other hand, a financial plan will help you save and invest, establish realistic goals and provide for a better future.

The basics of a financial plan aren’t complicated. You need to figure out where you are today, where you want to go tomorrow, and how you intend to get there.

You can take the first step by determining the current condition of your finances. The best way is to calculate your net worth. You do that by subtracting what you owe from what you own (assets minus liabilities). This is an excellent gauge of financial progress.

Then you need to examine your income and spending. Take a detailed look at the money you have coming in every month, and where it goes. What’s left over is the money you have to save and invest. This is an excellent time to consider how you can adjust spending habits to save more. By trimming spending and “paying yourself first” every month—in other words, committing a portion of your regular pay cheque to savings before you meet other financial obligations—you can increase your investment potential.

Once you have a clear picture of your financial situation and investment potential, it’s easy to establish financial goals. Do you want to save for a house, your children’s education, retirement?

Next, you need a strategy for reaching your ojectives. That calls for an investment plan and a diversified portfolio of investments that reflects your financial situation, tolerance for risk and goals.

There are other financial matters to address. These include establishing an emergency fund, and insurance coverage (life, disability, long-term care and critical illness coverage). These can help protect the wealth you build and get you through financial emergencies.

It’s a good idea to enlist professional help. Your financial advisor can help with every step of your financial plan. If you don’t have a plan, or you haven’t reviewed your strategy lately, call your financial advisor right away.

Edward Jones. Member CIPF. Member IIROC.