Stanley - Financial behaviors among women

Saturday, May 15, 2004

As their mothers did before them, today's women continue to be the principal hands-on managers in the household. From handling the monthly budget to serving as primary caregiver, women are still the "rock" of their families.

But unlike the generation that preceded them, today's women face new financial challenges as a result of increased life expectancy and income requirements, more self-reliance, and a whole new range of lifestyle choices -- not marrying, not having children -- far less acceptable in years past.

According to a recent survey by Prudential Financial, women -- specifically from the Baby Boom generation -- are beginning to embrace those challenges. In fact, the study showed the financial role of women has expanded greatly and is evolving rapidly.

Some notable findings from the survey include:

-- Women have adopted expanded financial responsibilities for growing and protecting wealth that include sole or joint responsibility for IRAs (66 percent), annuities (60 percent), life insurance (82 percent) and estate plans/wills (79 percent).

-- 83 percent of women said they understand the amount of money needed for a secure retirement.

-- 84 percent of women recognize securing long-term care is important.

Not keeping pace

While the level of women's financial awareness has grown in recent years, the survey also revealed that this increased awareness has not translated into the action needed by women to keep pace with their financial needs.

For example:

-- A large majority of women (73 percent) believe that providing for the future of loved ones is important, but just 14 percent have conducted detailed financial planning.

-- While 84 percent believe securing long-term care is important, only 13 percent currently own long-term care insurance.

10 tips to take charge

When you consider the gap between knowledge and action highlighted in the survey, it's clear women need to do more in support of their own financial future. If you're trying to balance your job or the needs of your family with taking charge of your finances, keep these 10 tips in mind:

1. Collect all paperwork from the past six months that offers a glimpse into your financial picture. Whether it is investment statements, bills or credit card statements, these items will provide a snapshot of your financial situation.

2. More than simply collecting paperwork, you must actively understand how much money you make and where your money is being spent.

3. Learn how to budget. You shouldn't spend what you don't have.

4. Consider unexpected life events and special circumstances. Would you be able to survive financially if your spouse or loved one suddenly died? Are you a business owner, or a single mom trying to balance the need to work with caring for your children? Being prepared is pivotal.

5. Review your financial situation at least once a year. By reviewing your portfolio regularly, you can stay ahead of world events, tax laws and other life events that may impede financial growth.

6. Eliminate the unnecessary. Do you own credit cards you do not need? Or are you carrying credit card balances that could otherwise be drastically reduced or eliminated through effective planning?

7. Do not underestimate how much time you will spend in retirement. With longer life expectancy, you can expect to spend 15 to 20 years in retirement.

8. Empower yourself through continued education. When it comes time to take action, you cannot buy or invest in what you do not understand, and through education you will gain independence.

9. Find a financial professional you can trust, one who is genuinely concerned with your well-being and has the expertise to assess your needs, goals and financial situation.

10. Focus on yourself for once. You spend so much time tending to the needs of others that you often neglect your own. And, focus on the long term. Not just what your needs are today, but instead, where you'd like to be tomorrow.

Sharon Stanley is a representative of The Prudential Insurance Co. of America in Cape Girardeau. (334-2603 )

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