Professional Women: How to Take Control of Your Financial Life

By 2030, American women are expected to control approximately $30 trillion in assets¹, a figure nearly equivalent to the annual GDP of the United States. Along with this rising economic influence, nearly half of women say they feel confident about their finances, yet only 28% feel empowered to take action on them.²

Here are five steps professional women can follow to take control of their financial lives.

1. Know your net worth

The calculation of your net worth is simple enough - take everything that you own and subtract everything that you owe. However, simple does not always mean easy, especially if you have money spread all over the place.

On the asset side, take time to locate all your financial accounts. Don’t forget about former and current workplace compensation including 401(k), pension plans, and stock awards.

On the liability side, tally up any loans, mortgages, credit cards or other debts that you have. Subtract your total liabilities from your total assets, and that’s your net worth.

Knowing this number is the best place to begin building financial confidence. Consider it a snapshot of your starting point. Tracking changes in your net worth over time is a great way to measure your financial progress.

2. Create your safety net

A big part of feeling financially in control is knowing that you won’t easily be knocked back on your heels by an unexpected event. Before you dive headlong into building your long-term investment portfolio, there are a few immediate safety measures that you may wish to take.

Consider establishing an emergency fund. A good rule of thumb is to think about having enough money set aside in cash to comfortably cover your expenses for 3-9 months.

Another frequently overlooked item is to make sure that you have updated beneficiary designations on your investment accounts and insurance policies, and that your estate documents are in order.  It can be beneficial to consult a Wealth Advisor when reviewing your documents to ensure you have appropriate coverage.

3. Define your money values

This is where things get really interesting. What matters most to you when it comes to money?

How do you balance objectives such as the desire to travel or pursue hobbies versus the wish to financially assist family members or support charitable causes? Are you counting down the days to retirement, or do you love your work and never want to stop?

Be honest with yourself and consider discussing your vision with close family and friends. Financial planning is about more than just saving, it is about making conscious decisions on how you use your money to achieve your goals.

4. Set your goals

Knowing what matters to you makes it possible to set quantifiable financial goals over different time frames. If you are feeling stuck, try journaling or talking with a trusted contact. It can be helpful to think about goals in these different buckets:

• Short term goals (0-3 years)
• Medium term goals (3-10 years)
• Long term goals (10+ years)

Once you know your goals, consider having a Wealth Advisor run projections to help you translate these goals into a clear plan for spending, saving, and investing. Having a solid plan that you can refer back to is yet another pillar of your financial confidence.

5. Invest with purpose

While investing with purpose will look different for everyone, here are several ways you might consider making impactful investments:

Evaluate your investment portfolio is one of them. Selecting a mix of investment assets that reflect your goals is an important initial step, while also being smart about risk and taxes. Even if the markets get rocky, your goals can provide the sense of purpose you need to remain committed to your strategy.

You might also think of ways to invest in yourself. Perhaps in training or education that can advance your career or enrich your life. Or maybe in hiring help that can free up more of your time for family, career, or personal interests.

Finally, you might wish to invest in other people, whether that means supporting younger generations, giving gifts to charity, or volunteering your time and expertise to a cause that you care about.

Financial confidence comes from having a strong framework. It all about knowing what you have, what you want, and having a plan to get there. It is normal to feel uncomfortable or overwhelmed - know this is not a process you have to go through alone. Surrounding yourself with a supportive team can provide the guidance you need to feel empowered.

[1] Source: https://www.mckinsey.com/industries/financial-services/our-insights/women-as-the-next-wave-of-growth-in-us-wealth-management

[2] https://business.bofa.com/content/dam/flagship/article/Women-money-confidence/WomensResearchReport.pdf

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