Friday, October 18, 2013

Women often rely too heavily on others when it comes to making important financial decisions. That's according to Lori Embrey, a Certified Financial Planner ™, associate vice president of Hamilton Capital Management and a founding member of the Women's Exchange, which works to develop greater financial literacy among women. She offers six tips for women looking to take charge of their own financial security.

Your choices should reflect your goals. "Look in the mirror," Embrey advises. "Your financial situation is likely to be a reflection of the choices you've made: choices to spend or save, to use cash or credit, to invest or not invest, to cover your eyes and hope for the best or to take charge of your finances. If you want to change your reflection, spend some time carefully considering your short-term and long-term goals. Write them down, including an estimated cost and date of completion. Be specific. Then make sure that your goals define your choices rather than your choices defining you."

Take a closer look. "Once you've defined your goals, learn what it will take to achieve them," she says. "Start by taking inventory to see where you stand. Know your assets (what you own) and your liabilities (what you owe) and review your financial statement regularly."

Don't pass the buck on money matters. "Women are often the managers of household cash flow, but we tend to pass the buck to partners, husbands or fathers when it comes to making big financial decisions or investing for our future," says Embrey.  She encourages women to take an active role in making decisions and gain confidence by talking money with a trusted friend or joining a financial discussion group for women.

Put your money to work. "When a $10 store coupon arrives in the mail, we rush right out to use it," she says, "but we leave a 401(k) match sitting on the table. An investment in your employer retirement plan may be worth far more in tax savings and could earn you an employer matching contribution as well. It's putting your money to work. Take advantage of opportunities like these. While volatility will always be a risk, the price of doing nothing is a certain decline in your standard of living each year. Because the price of groceries isn't going down and your savings account can't keep up."

Test your safety net. "I've counseled countless clients who 'thought this would never happen to me,'" Embrey recalls.  "The death of a loved one, disability, job loss, divorce or other personal trials derailed their life plans and upset their financial security. They were forced to make big financial decisions with little knowledge when they were least emotionally prepared to tackle the challenge. Test your own financial safety net before you need it to be sure your household can continue to thrive."

Money is a tool. "Learn to view money as a means to get where you want to go, to help further causes that are important to you or to take care of loved ones," she recommends. "Managing money with forethought will help you use it more efficiently and make good choices."

Source: Hamilton Capital Management

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