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Free Financial: Why Money Really Matters
For 20 years DAME's Kelly Alexander has been charging individuals, families and businesses for her financial advice. At DAME she gives it away for free. This month: why you need it.
By Kelly Alexander, CRPS® CFP™
Published: Dec 01, 2007
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DEL.ICIO.US
YAHOOIf the last time you really paid attention to your personal finances was to see if you could afford the latest Stella McCartney bag, you’re not alone. Yet, according to a Harris Interactive Poll, 62% of female respondents said they were so confused or unknowledgeable about investing that they deferred decisions to others, procrastinated or stayed away from financial planning and investing. About 57% said they wished they would’ve learned about money and finance in school. Also, women desire financial security, rating it 15 to 20 times more important to them than money-related status or respect.
So there’s the rub: women are worried, but ignoring the issue. This works for your pedicure but for financial planning, it’s hardly the way to go.
So, as DAME’s financial columnist explains, pulling the 600 thread count sheets over your head only hurts you (and your loved ones). Here, Kelly Alexander,Certified Financial Planner™ with Smith Barney, breaks down your dollar dilemmas—pro bono.
“I hate this stuff,” my sister said.
My sister has a bachelor’s degree in applied mathematics and systems engineering. She has a PhD from Harvard. She is one of the country’s foremost experts in her field and she’s scared of the choices in her employer’s retirement plan?
Like many, my sister is intense about financial things. Meaning, intensely afraid yet bored with them. Saving, budgeting, investing, retirement, credit, debt and all topics financial are things she doesn’t want to think about, talk about or make decisions about.
School is open. You are now enrolled in Personal Finance 101. Too bad it wasn’t mandatory in high school, right? Well, knowledge is power and DAME hopes, with education we can eradicate (or at least, help reduce) dangerous trends like running up too much debt—whether it be a credit card in your 20s or a home equity line of credit in your 40s.
So, dear Dames, it is my mission to help you achieve financial security now, retire earlier, spend more time with your family and friends, less time chasing dollars and have something to leave behind for your loved ones and charities of choice.
First lesson is, the only dumb question is the one you don’t ask. Second lesson, to get the ball rolling, the teacher will ask the first question:
Q: Oh boy, money, where do I start?
A: With a sense of purpose and the end in mind. Decide what’s important to you.
Education, career, marriage/partnership, motherhood, widowhood, retirement is a common cycle for women.
You may have as many years out of the paid workforce (child care, caring for an aging parent, retirement) as you had in it. Creating a financial plan gives you the best shot of achieving and maintaining the lifestyle and financial security you want throughout your life. It may enable you to invest your time and talents in meaningful ways.
Write the things you want on paper. In a relationship? Discuss them with your partner. The things you (or both of you) want are the underpinnings of your financial plan. Write your plan. Review it annually.
Amend your plan when important life events occur: marriage, child, divorce, job loss, retirement, change of priorities, etc.
Here is how you can get the ball rolling:
*What do you dream about?
*What do you want to splurge on?
*How much money do you want to make?
*How much do you need to save for your later years?
*What is important to you?
*Are you spending enough time with family and friends?
*What do you want to experience or have?
*Do you like to travel? What places do you want to visit within the next three years?
*Within the next 10?
*During retirement?
*Where do you want to live?
*Are you giving back to your community?
*Are you in touch with your spiritual beliefs?
Divide your paycheck into thirds. One third for mortgage/rent, a third on living expenses, one third for saving.
Save your money. One day, it’ll return the favor!
All Dames are at different stages of life but it’s likely we each have a money question. Register with DAME, post your comment or query and get your free financial advice now.
Kelly Alexander, a Certified Financial Planner, Chartered Retirement Plan Counselor and Chartered Retirement Plan Specialist has helped individuals, families, women and businesses with their retirement planning for almost 20 years. The retirement geek, who loves and collects kitschy Americana manufactured between the great depression and 1967, firmly believes in the power of mascara and naps and has not owned a television since 1984.
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