Every woman is a CFO

Today, many women are the main breadwinners in their families.1 And since some women are waiting longer to start a family, they have more time to accumulate wealth and strengthen their financial footing compared to previous generations.

Women typically control the majority of U.S. household spending, managing both day-to-day money and taking the lead on major financial decisions for their families. In fact, they’ve become the family’s chief financial officer.

Facing realities

Women earn 78 cents for every dollar a man makes in today’s world. Further, they’re more likely than men to take time away from work for child-rearing or to care for an elderly relative. And, they’re living an average of five years longer than men.

For all of these reasons,  women must often make their money last longer, while having a smaller pool to draw from at retirement.

There’s no time to waste. Early savings benefit the most from the power of compounding, but adopting a savings plan at any time is an important step in the right direction.

Getting budget friendly

The first thing any financial officer needs to know is how much money is coming into and going out of the organization. In order to plan for the future, a household must do the same.

You can start budgeting with the 50/20/30 method.

  • 50 percent of your income should go toward fixed expenses, like housing, utilities and insurance.
  • At least 20 percent should be put into savings, like retirement funds and an emergency account. If you can live comfortably by putting away more than 20 percent, try to do so.
  • Spend less than 30 percent on discretionary items, such as dining out, entertainment and gas.

Re-evaluating retirement

Here are some tips to better ensure your financial security:

  • Weigh your work benefits. Benefits are a major consideration with any job offer. Employers who match part of your savings in a retirement plan are essentially providing you with free money, so take advantage of that perk.
  • Work as long as possible. The longer you work, the more time your money has to grow and the shorter the retirement period you need to fund — plus it can be good for your health, both mentally and physically.
  • Something is better than nothing. Even when money is tight, make retirement savings a priority. If all you can manage is $10 or $20 a week, you should still put it away. Even small amounts can grow to something sizable over the decades.
  • Taking control of your financial future. By educating yourself about money, you’ll be able to make more thoughtful decisions about your future.

Regardless of your life situation, make sure you have a full grasp of your finances and take the time to educate yourself about budgeting and savings. By understanding the investment choices you have available for retirement, you’ll be able to choose the most appropriate options for you.  A financial professional can help you set your financial goals and develop a plan to achieve the future you desire.

1“Breadwinner Moms.” Pew Research Center. May 29, 2013. http://www.pewsocialtrends.org/files/2013/05/Breadwinner_moms_final.pdf