6 Steps to Take Charge of Your Financial Journey

When it comes to managing money, women often take a unique path. Our approach is influenced by how we’re raised, our experiences in college and the workplace, and our roles in managing our households and families today.

Traditionally, women have been taught to be savers, and it’s not uncommon for some of us to leave major financial decisions to our significant other while we manage the day-to-day household finances. Unfortunately, this experience may leave many women lacking in terms of financial literacy, feeling disconnected talking to wealth managers and uninformed about making investment decisions.

According to the Wall Street Journal, “Twice as many women as men in the U.S. have no money in the stock market, Merrill Lynch says, and 41% of young women versus 28% of men say their biggest fear isn’t market volatility but not knowing what they are doing.”

In our business, we unfortunately see this problem regularly. “I’ve met women who are leaders in their own fields express a lack of interest or understanding of the financial markets,” says my colleague, Talia Pierluissi, director in wealth management and Aspiriant partner.

The good news is more women are taking charge of their financial world. Consider that women today:

• Control 51% (approximately $14 trillion) of U.S. private wealth
• Are the sole or primary earner in four out of 10 U.S. households
• Own 40% of U.S. businesses
• Sit on the boards of all S&P 500 companies

Truth is women have many of the skills and intuitions that are essential for strong financial health. Being goal-driven, holistic and mindful are great traits for successful investing and wealth management. It’s just a matter of receiving the right guidance for our individual financial journeys.

Feel confident and secure with your money

The steps for financial wellness are the same for both women and men. The key is harnessing individual and shared strengths, and recognizing areas where we need help, to achieve our life goals.

1. Build a plan — When you know where you want to go, you can develop a plan to get there. Ideally, this includes all facets of your financial life — from spending priorities and cash-flow management to tax strategies and estate planning.

2. Stay on target — Remember to follow your plan, not the daily market report. Set your investment strategy based on your goals and revisit those goals, along with your investments, semi-annually or annually.

3. Don’t second-guess — Accept that everyone will always have uncertainty, no one can ever know it all. Make the best decision you can with the facts at hand, and then move on.

4. Use your network — Women are expert networkers, helping each other with everything from landscaping to physician references. Use that same powerful network for managing wealth. Don’t be afraid to talk about money with friends and colleagues.

5. Be a life-long learner — Spend some time reading a variety of financial information and thinking about your financial life — your goals, your human capital, your investing capital, your values, etc. Gaining a comfort baseline is an important part of being an engaged and informed investor.

6. Choose your team — A wealth manager can help guide a range of financial decisions — not just where to invest, but how to optimize your financial life. To find the right advisor, write a list of questions to ascertain how they approach financial planning, recommend investments and manage assets.

“If the advisor’s answers leave you more confused, that’s a red flag and someone to avoid,” Talia says. “I try to avoid jargon and bring it back to the basics such as managing spending, building wealth and staying focused on long-term goals.”

Women usually wear many hats, and serving as chief financial officer of the household is increasingly becoming one of them. By charting a new, purpose-driven path to creating and maintaining wealth, we can build upon our unique strengths to feel confident and secure with our money no matter where life takes us.

Learn more by reading Aspiriant’s white paper, “Women Taking Charge: Six steps to feel more financially secure, and watching our video.”