Women Who Achieve Financial Freedom Deserve Our Esteem
With elections coming up, many of us are looking for candidates who will best promote our values. You can also vote with your pocketbook. We often look to public figures such as Sheryl Sandberg, Brene Brown, Michele Obama and JK Rowling as inspiration, but everyday women who have overcome challenges and conquered fears to establish a better life can be just as inspiring.
As a financial planner I hear women’s personal stories and watch them overcome such hurdles as trauma, financial hardship and the ordeals of household money management to achieve financial freedom and a sense of peace. These stories rarely make news, but are every bit as inspiring. Sarah became widowed in her mid- 50s. She had spent her time raising her two children while her husband, the breadwinner, took care of the family finances. They lived a very comfortable life until her husband was diagnosed with cancer and died about six months later from a rare complication.
Sarah was panic-stricken. She knew nothing about the family’s financial situation or how to manage finances, but was determined not to let their children down. First there was handling the estate, and then she had to figure out how to manage her cash flow. She wasn’t sure she could afford to pay all the bills coming in.
Sarah spent the first weeks tracking down legal and financial papers and uncovering the various accounts. She was familiar with their bank accounts, but knew little about their investment accounts, insurance policies or her husband’s employee benefits and retirement plans. Little by little she chipped away at the areas she didn’t understand. Over time, she learned how to understand the language of financial statements. She was willing to ask questions until she understood the concepts and numbers.
Today, Sarah is at peace. She and her children managed to maintain their lifestyle and she is pursuing her own career. It took courage and commitment to keep at it. It’s important for all women to be proactive and learn what Sarah did before they have no choice. Being in charge of your financial future is empowering and will give you a sense of ease. Here are a few of the areas you should know about.
Know what returns to file and when. Whether gift or estate tax returns need to be filed. Which filing status is best.
Know how to select a policy. Group health insurance ends at death or separation from an employer with options to continue for 18 months at an inflated price or obtain a new individual policy.
Understand all employer benefits such as group life, health or disability insurance, survivor pension benefits, retirement plans such as 403bs, 401k or profit sharing plans, stock purchase plans or stock options, etc.
Be informed about what kind, how much and where. Is more needed? Know where to invest any proceeds.
Learn the terms governing mortgages and home equity loans, student loans, auto loans and the like.
Know how much to spend monthly and which accounts to pay from. Know how much earned income is required and when bills are due.
Understand how much risk to take. Are the current investments appropriate? Know what types of advisors there are and which ones are fiduciaries.
Learn what needs to be in place for children and who will be the power of attorney if required. Do you need a will or trust or both? Who will act as trustees, guardians or executors? Several women who have gone through this journey were inspired to create organizations that provide tools and resources to educate and empower other women.
Here are a few of my favorites:
Lyn Dippel, JD, CFP®, president of FAI Wealth Management, provides financial planning and investment management for transitions such as retirement, career changes, sale of a business, relocation and inheritance.