How to Start Saving

No matter how much debt you're in, no matter how old you are, no matter what's happening this week on Wall Street, it's never too late to start funding your future by creating a savings plan. It's easy to put off saving for the future because of current bills and expenses. But don't let your current financial situation stop you from setting savings goals: close your eyes, hold your nose, and put that money aside for yourself.

Understand where your money is going now: Write down everything you spend money on for a few months. You may think about carrying a small notebook to record cash purchases and an envelope for credit and debit card receipts. Cellphones also often have a "Notes" function where you can record recent purchases. Put all of your spending information together on WISER's Budget Sheet to find out what your expenses are for an average month. By tracking your spending, you can look for ways to reduce your expenses and relocate that money into savings.

Make a plan to save a certain amount each month: Plan to put a certain amount of money or percentage of your income into savings every month. Set savings goals and make sure to stick to your plan. Once you start saving and stick to it, you won't even miss that money.

Reduce your credit card debt: Monthly credit card bills can tie up money that you could be saving. The Institute of Consumer Financial Education can help you find ways to lower your debt. If you want to continue using a credit card, but you're tired of high interest rates, visit http://www.blogger.com/www.cardweb.com for information on how to find the best low-interest credit cards.

Wall Street Financial Crisis Raises Issue of Families Living in Poverty

In the wake of the financial crisis on Wall Street, The United States Joint Economic Committee held a congressional hearing on Thursday, September 24 entitled, “Leave No Family Behind: How Can We Reduce the Rising Number of American Families Living in Poverty?” Headed by Chairman Senator Charles Schumer and Vice-Chair, Representative Carolyn Maloney, the hearing featured a number of poverty expert panelists who offered insight on the current state of poverty and how to deal with the rising number of families in poverty.

The most recent statistical figures on poverty show that the rate rose 12.5% in 2007. According to panelist John W. Edwards, Jr., Chairman of the Community Action Partnership, Inc., this increase has been marked by a rise in the number of married couples who are in poverty. As a result of the increasing poverty rates, $679 billion will be spent on means-tested welfare programs in fiscal year 2008. These programs provide cash, food, housing and free or subsidized medical care. Panelists cited the outdated poverty measure as a cause for concern; the measure is still based on the average amount a family spent on food in the 1950s.

As the country confronts severe economic upheaval, many Americans will be affected adversely. According to Senator Schumer, “recessions hit the ordinary working Americans of Main Street the hardest.” The situation on Wall Street will very likely serve as a catalyst for pulling many families into poverty because of job loss, salary loss and benefit loss.

Though policy makers in Washington are currently pushing for legislation to reform systems which seem to lack in effectiveness, you and your family should take great care to reduce the impact of financial crises by making smart financial decisions. Visit the WISER website for a variety of tips and suggestions on smart money management.

Young Woman's Financial Planning Guide

Marriage & Money: Joining Assets the Smart Way

You’ve imagined the scene before. Your partner has finally mustered the courage to pop that proverbial question. There are tears, you say yes, the ring is perfect. Pretty soon, your life is a chaotic flurry of decisions: Canapes or mushroom caps? Mauve or lilac taffeta bridesmaid dresses? Hawaii or Florence?

Getting hitched is certainly an exhilarating time in a young woman’s life, but important concerns often get lost amidst the amorous atmosphere. Marriage is a serious commitment and, as such, should be approached responsibly. Specifically, you and your spouse-to-be should think about the financial implications of the consolidation of your lives.

According to Betsey Stevenson, assistant professor of business and public policy at the University of Pennsylvania’s Wharton School, “A lot of the debates people have about money are code for how we want to live our lives.” If you and your mate seem like financial opposites, don’t fret just yet. Making use of the tips below may help you bring about a more compatible financial relationship:

Make expectations clear: There are many financial concerns to be considered when starting a family. Private or public school for the kids? A life of thrift or a life of extravagance? When expectations are made explicit from the beginning, you and your husband can keep financial skirmishes to a minimum. According to Karen Altfest of the New York firm L.J. Altfest & Company, weekly meetings to discuss finances will help a couple stay “in sync with each other’s goals.”

Forge a financial partnership: You and your significant other may benefit from constructing a budget and keeping track of your finances together. Decision making in respect to these aspects should also be done together so as to avoid rifts down the road. According to Mary Ann Sisco, national wealth adviser at JPMorgan’s private wealth management division, “When [you] are making the decisions together, [you] really have ownership of those decisions and any results of those decisions.” So, even if the choices you make together turn out less than favorably, neither spouse will be able to play the blame game.

Decide on long-term financial goals: Though such issues as retirement and paying tuition may seem like distant notions in the eyes of newlyweds, getting a jump start in respect to these matters is a very financially sound decision. You and your spouse may want to set specific goals (e.g. saving up for the cost of private college tuition for two children) and start investing now in order to ensure maximum growth over time.

Visit the WISER website and explore such fact sheets as 5 Money Mistakes Women in Couples Should Avoid to learn more.

Retirement Calculators: Predicting Your Future Income

Social Security Administration (SSA) Benefits Calculators: The SSA has four online benefits calculators-- Quick, Online, Windfall Elimination and Detailed--which are available to help you understand and predict your future Social Security benefits.

SSA Retirement Estimator: The Retirement Estimator allows you to factor in "what if" scenarios regarding future earnings and retirement dates. It provides you with an estimate of your retirement benefits that resembles the estimate on your annual Social Security statement.

myPlan Snapshot: Fidelity Investments offers a free calculator called myPlan Snapshot, which predicts future retirement income based on your answers to a few questions regarding your current savings and investments.

T. Rowe Price Retirement Income Calculator: This calculator is a useful tool in predicting how much-- and how fast-- you will be able to draw down on your retirement savings once you actually retire. Using what is known as the Monte Carlo Simulation method, T. Rowe provides a more realistic assessment by accounting for 500 various, fluctuating market returns, instead of one average rate of return over a period of time.

CNN Money Retirement Calculator: This basic calculator asks you a few questions about your age, savings and retirement plans. It provides you with an estimate of how large your nest egg will be and how likely you are to create it.

WISER also has an excellent retirement income calculator, along with several tips and resources to help you estimate your future retirement income. For more information, visit the WISER Women Retirement Income Calculator.

Young Woman's Financial Planning Guide

Take Advantage of Your Employer's Pension Plan

There seems to be a number of things to consider when entering the workforce. Like what is business casual anyway? Who has all this money to go out to lunch every day? What exactly is it that my employer does?

Surprisingly, these issues pale in comparison to some of the bigger concerns you'll be facing as a newly minted member of the workforce. In an age of increasing financial instability, it is important for Generations X and Y to take charge when it comes to their retirement futures. By taking advantage of the pension plans offered by your employer, you can take steps towards securing financial stability.

According to a 2006 survey by Hewitt Associates, only 31% of workers ages 18-25 who are eligible for a 401 (k) plan participate, compared to 64% of workers ages 26-41 and 72% of baby boomers. Many of these young workers reason that they can start saving later, but acquiring savings takes time. Below are some basic facts about pension plans that will help you better understand how they work and why they are important.

There are two basic kinds of employer-sponsored pension plans:

1) Defined Benefit: In a defined benefit pension plan, your employer invests money and pays you at retirement. In private company DB plans, the employer will often fund the plan and make investment decisions. The benefits you accrue will be based on your years of service as well as your highest average pay. Most employers require that you stay at least five years to be vested, so this plan is valuable to employees who stay a long time with their employer.

2) Defined Contribution: The defined contribution plan, such as the 401 (k) plan, is one in which you decide to have money taken out of your paycheck to invest in a retirement savings account. Some employers will contribute or match a portion of your monthly contribution. Unlike the defined benefit plan, you will choose your investment options so make sure to choose sound investments when utilizing this plan. The amount you choose per month is taken out of your pay before income taxes are deducted (the overall amount in your account also grows tax-deferred). An employee will usually have to stay 3-6 years in order to vest in the employer’s contributions (your contributions are yours to take with you when you leave a job).

An important consideration to make when thinking about pensions is the tendency of today’s young workers to switch jobs. According to Scott David, president of retirement services for Fidelity Investments, “the typical Gen X or Gen Y will work for seven different employers across their careers.” Although advancing one’s career or changing its course is not necessarily a bad thing, the following tips can help you responsibly maneuver such changes:

1) Wait until you are vested (5 years in defined benefit plans and 3-6 in defined contribution plans) to leave a job.

2) Compare the value of benefits between jobs. A substantial pay increase does not always offset the value of pension growth you stand to lose.

3) Avoid cashing in on your 401 (k) accounts. Though it may be tempting to use this money for a down payment or to pay off a credit card, think wisely about how this will affect your financial future.

National Life Insurance Month: Are You Covered?

Donnie Walhberg is spending some time away from his duties as frontman of the newly reunited New Kids on the Block to act as the spokesman for National Life Insurance Month. Wahlberg became aware of the importance of life insurance after he lost his sister, Debbie, when she was just 44. Debbie left behind a sixteen year old son and no life insurance. Wahlberg's nephew was lucky to have a family that was able to provide him with emotional and financial support following his mother's death. But many in a similar situation would face unwanted financial vulnerability at a time when economic stability is probably the last thing on their minds.

"She was a young woman with her whole life ahead of her, but like so many people, she didn't think about the 'what ifs,'" Wahlberg says in an interview with IFAwebnews.com. Unfortunately, many women choose not to address the "what ifs" in their financial planning. According to Life and Health Insurance Foundation for Education, only 59% of women have life insurance, compared to 64% of men. Women also tend to be under-insured when it comes to their life insurance: the Life and Health Insurance Marketing Research Association (LIMRA) says men carry an average death benefit of $143,100 while women carry an average death benefit of
$76,000.

Each wage earning spouse should buy enough life insurance in their working years to cover all of the couple’s joint debts, like mortgages and student loans, plus 20 percent. The extra 20 percent is a precaution in case there isn’t an opportunity for employment or benefits to begin after a partner’s death. Often, people will work with a reputable insurance agent to find homeowner’s insurance, life insurance and long-term care insurance. Talk to several agents before choosing one, and ask friends and family members for recommendations. Your state Insurance Commissioner will also have resources and a list of companies to contact. Check out the possibility of reduced rates for umbrella policies—such as policies that cover your home and car both.

Want to find out more about how to keep yourself covered? Check out WISER's Special Report: The WISER Woman's Guide to Insurance. For more information on National Life Insurance Month, visit the LIFE website.

Additional Resources: "All women-- especially mothers--need to have life insurance" by Susan Elliot, Denver Business Journal, "Donnie Wahlberg, industry to promote September as Life Insurance Awareness Month" from IFAwebnews.com.

Financial News You Can Use: The Healthcare Edition

Beware ignoring Medicare enrollment rules, InvestmentNews.com August 21, 2008: Financial advisors and future Medicare recipients, listen up: pay attention to Medicare enrollment deadlines, or you may face some costly consequences. Medicare only notifies potential-beneficiaries that they are eligible for Medicare if the beneficiaries apply for Social Security benefits before they turn 65. If you don't fall under this category, you must apply during one of three enrollment periods. Missing a deadline can result in higher Part B premiums or lapses in insurance coverage. Review your health insurance annually and start planning for Medicare at least six months before your turn 65. Visit Medicare.gov for more information on Medicare and Medicare enrollment periods.

Economic downturn not affecting individual policies coverage, but curbing medical care, from IFAwebnews.com August 19, 2008:
The National Association of Insurance Commissioners have released a national survey that shows "22% of U.S. consumers have reduced the number of times they see the doctor as a result of problems in the economy" while "11% of consumers have cut back the number of prescription drugs they take." Though cutting back on doctors visits and prescriptions may seem cost-effective now, these cost-cutting strategies can raise your insurance costs in the long run by putting you at risk for untreated health issues. Make your health a priority and use a budget to curb your spending in other areas of your life. For help on starting a budget, check out WISER's "Keep Track of Your Spending" fact sheet.

Uninsured to Spend $30 Billion, Study Says, from Wall Street Journal, August 25, 2008: A new study from George Mason and the Urban Institute reports that uninsured American will spend $30 billion out of pocket this year. Uninsured Americans often pay more and receive less care. If you're experiencing a lack of coverage, explore your options to find a solution to your coverage gap. The WISER Woman blog series "Healthier and WISER"offers information on healthcare options for stages in your life when you may be uninsured.

Healthier and Wiser: After Retirement

Healthier and Wiser

Many people who have health insurance obtain it through an employer. However, there may be times in your life when you are without coverage, facing coverage choices or grappling with retirement health issues. The "Healthier and Wiser" series will address some of the main health care coverage issues women encounter at different stages of their lives. It will point you in the direction of where to go to find more information. It is not intended as legal advice. You can check out the "Healthier and Wiser" series on Wednesdays.

This Week: After Retirement

If you are enrolled in Medicare and cannot afford to pay the out-of-pocket costs Medicare does not cover, is there any other assistance for you?

• There are state programs for individuals with incomes below or near federal poverty limits. For those at or below the poverty level, with limited resources, the Qualified Medicare Beneficiary Program (QMB) will pay your premiums, deductibles and co-payments under Medicare. The Specified Low-Income Medicare Beneficiary Program (SLMB) and the Qualified Individual Program (QI) pay Medicare Part B premiums for those with incomes between 120% and 135% of the federal poverty level. Call your state Medicaid office and ask if you are eligible. The programs can save you hundreds, or even thousands, of dollars each year.

• You might benefit from a Medigap insurance policy - a private insurance policy that pays out-of-pocket medical costs not covered by Medicare. Contact Medicare for more information on Medigap insurance policies sold in your state or call your state insurance commissioner. Every state offers free insurance counseling to seniors through a program called the SHIP program. Call Medicare at 1-800-Medicare for the nearest SHIP site.

• The National Council on the Aging has an interactive website program, called Benefits Check-Up, that will point you toward an array of state and private programs that can help you with medical costs. Find it on the web at www.benefitscheckup.org.

The Young Woman's Financial Planning Guide: Part 4

The Urban Girl on a Budget: Why Shoes are Not a Sound Investment

When the HBO series “Sex and the City” debuted, it became wildly popular amongst young women. Witty and relatable, the show offers beautiful clothing, romance and the allure of the urban lifestyle. And yet, the show lacks in one crucial respect: reality. Though watching Carrie traipse through the city in high-end couture may be a glamorous scene to behold, chances are that a columnist at a modest publication would not be able to afford such extravagances.

If you're a young woman who craves a metropolitan lifestyle, err on the side of thrift. Here are a few tips for staying fabulous while being frugal:

1) Responsible Money Management: According to the JumpStart Coalition for Personal Financial Literacy, “many young people fail in the management of their first consumer credit experience [and] establish bad financial management habits.” Such resources as “The Teen Girl’s Gotta-Have-It Guide to Money” by Jessica Blatt can help guide you in constructing a monthly money plan to track your finances. You can also visit WISER's website for fact sheets on how to start saving. Such tools can be instrumental in teaching you responsible budgeting that will help you avoid high-risk financial situations and start investing in your future.

2) Leave the credit card at home! In one particular episode of “Sex and the City” we watch Carrie realize that, despite amassing $40,000 in Manolo Blahniks, she has no assets or savings to assist her in placing a down payment on her apartment. In order to avoid this, be careful with your credit. According to a study by Qvisory, three out of four Americans under 35 are in as much or more credit-card debt this year as last and only half are making their minimum monthly payments. So before you splurge on those gorgeous shoes , think about how it may affect your future livelihood.

3) Be Smart About Housing: Metropolitan areas are infamous for their high housing costs. According to the Fiscal Policy Institute, New York City housing costs have jumped 106.4% since 1987 and a two bedroom can run for nearly $2500 per month. Try to find an apartment yourself, without the help of a broker. For some this may seem like a convenient service, but brokers in major cities may charge clients the equivalent of one month's rent to help them find an apartment. When you're searching, think about living with a roommate, which can slash your monthly rent in half. But make sure that you both are able to pay your rent on time every month. Carrie may have been able to enjoy the solitude of her own place in TV-land, but real life requires smarter choices.

Free Credit Reports: More Than a Catchy Jingle

If you've turned on your television recently, you've probably encountered commercials featuring the musical stylings of a certain free credit report website's spokesman. The songs pitch a seemingly great deal---free, personalized credit reports, just a click away! Though these dittys may be alarmingly infectious, their pitch raises some questions. Like what is a credit report? What do the numbers mean? What do they usually cost?

What is in a Credit Report?
A credit report includes the following:

• All of the times you have borrowed money, the date, the credit limit and a history of how you have paid the money back
• A list of late payments that were 30, 60, 90 or 120 plus days late
• Any bankruptcies and tax liens,
• Each time that a creditor or potential lender has made an inquiry about you when the lender was deciding whether to give you credit, and
• Overdue payments that have been referred to a collection agency.

Bankruptcy stays on your credit history for 10 years and other negative information remains on your credit history for seven years. Credit inquiries stay on your credit history for two years.

What is a Credit Score?
A credit score uses a number between 300 and 850 to inform creditors and lenders of how reliable you are when it comes to paying off your debts based on the information from your credit report.


How can I get a free credit report?
As of September 2005, all US Citizens are eligible for one free credit report from each credit agency per year. To receive your free annual credit report visit www.annualcreditreport.com or call 1-877-322-8228.

You can also get a copy of your report for free anytime if:

1. You have been denied credit for any reason and a credit report was used in making the decision. You have 60 days to mail proof of rejection to the reporting credit bureau;
2. You are unemployed, actively seeking employment, or if an employer or potential employer has requested a credit report;
3. You are receiving public welfare assistance; or
4. You believe your credit report has been used to perpetrate a fraud.

A poor credit record can affect your ability to borrow money to pay for a car or an education, rent an apartment, buy a house or even get a job. Check your credit report once a year for errors or problems and write to the credit agencies to fix the errors or to insert a statement of explanation.

Happy 401(k) Day!

Now that Labor Day has come and gone, it's time for another holiday that recognizes workers: 401(k) Day. Though this holiday may not provide a day off or a reason to fire up the grill, it is a time to reflect on your 401(k) status. Do you have a 401(k)? If not, how can you get one? If you have one, you may still have some questions about how it works. Here are a few Q's and A's on 401(k)s to start off your 401(k) day celebration!

Q: What is a 401K?
A: A 401(k), a type of defined contribution plan, is a savings arrangement through which you can set aside money for retirement. If you work for a tax-exempt organization, you are eligible for a 403(b) instead, which works in the same ways as a 401(k). The money you contribute to a 401(k) is taken from your paycheck before taxes. You choose how to invest it and you are only taxed if you withdraw money. You can withdraw money without a penalty at the age of 59 and a half.

Q: How do I become a member of the retirement plan at my job?
A: Talk to your employer or Human Resources director about how to join the retirement plan at your job. By law, your employer decides who is covered by the plan. If you are a part-time or contract worker, you may not be eligible to join the 401(k) program at your job.

Q: Can I withdraw money from my account while I am still working?
A: Yes. According to the September 2008 Kiplinger Retirement Report, "88% of plans in 2006 allowed participants to take loans...Under IRS rules, the loan amount generally must be less than 50% of the account balance." If your plan does not have a loan provision, you may be able to qualify for a severe financial hardship withdrawal. According to the IRS a hardship withdrawal includes the following:

1. College tuition for you or your dependents
2. A down payment on a primary residence
3. Non-reimbursed medical expenses
4. Preventing eviction or foreclosure from your home

Check your plan document and consult your Human Resources director. But remember: if you choose to withdraw from your 401(k), you may face penalties and you will lose compounded growth on the money you borrowed, which will reduce your overall retirement savings. Make sure you are aware of the borrowing rules associated with your 401(k) and create a personal plan to repay your 401(k) loan to avoid taxes and fees.

Q: Can I stop contributing if I feel I can't afford to?

A:Most plans allow you to stop contributing at any time though employers are not required by law to do so. Some plans may require specific percentage contribution for a full plan year so be sure to check your plan rules.

Q:What happens to my 401(k) account balances if I choose to leave or am fired from the company?
A:First, remember that it usually takes five years to “vest” in the money contributed by your employer. So don’t lose out by leaving your job too soon! Your options are the same whether you voluntarily leave or are terminated. If your account balance is more than $5,000.00, you can leave your money in the plan. To avoid a penalty, your vested account balance can be rolled into another 401(k) plan with your new employer or put into an Individual Retirement Account.

For more information, check out the Retirement Plans section of WISER's website. Some of the questions featured here were adapted from information provided by David Wray, President of the Profit-Sharing Council of America. The Profit Sharing Council of America established and sponsored 401(k) Day. Their website, www.psca.org, as well as their 401(k) day website, www.401kday.org, offers a wealth of information on 401(k)s for every generation.

Successfully Weathering the Storms: How to Prepare Your Family and Your Assets in the Wake of Disasters and Emergencies

Three years after ravishing the state of New Orleans and the Mississippi gulf coast, the effects of Hurricane Katrina remain fresh in the minds of its victims and the country. In recent weeks, America braced itself for Hurricane Gustav, fearing a similar outcome. The diminished impact of Gustav is at least partially attributable to heightened preparedness. Just as the state of Louisiana and the federal government sought to practice responsible preparedness, you too can employ smart decision-making in order to properly prepare for unexpected disasters and emergencies.

Disaster often strikes without warning, leaving those who are ill-prepared in precarious situations. In order to avoid this, here are a few steps to secure your home and assets:

1) Know the particulars of your insurance policy: Go through your policy and find out the specific disasters that it does and does not cover. Typically, home insurance does not cover flood damages. Visit FloodSmart.gov to learn more about flood insurance.

2) Create a home inventory: In order to file an insurance claim following a disaster, you will need to provide a list of what has been lost or destroyed. Visit knowyourstuff.org to download a free software program that organizes valuables and documents digitally. Try to keep important records such as birth certificates and Social Security cards in a safety deposit box outside of the home.

3) Know your benefits and who to call when disaster strikes: It is important to know what emergency and employee-sponsored benefits you and your family may qualify for in the case of an emergency. You may be eligible for temporary housing, funds and food assistance through both FEMA and the USDA. The IRS also offers tax relief and other benefits for disaster victims. Call the IRS helpline at 1-877-829-5500 to find out what you may qualify for.

4) Regain financial health: In order to diminish the uncovered costs of disasters, you can turn to various institutions for assistance. The Pensions Benefits Guaranty Corporation is a federal corporation that pays out benefits under certain pensions and can be contacted at 1-800-400-7242. Some 401 (k) plans also have allowances for early withdrawals during emergencies. Contact your sponsor to find out these details.

Generation Debt: Financial Planning for the X and Y Set

They call them generations X and Y.

Their shared history has been told and retold through various VH1 specials. They're different, of course: different time periods, different unfortunate childhood fashions, different classic sitcoms. But even though these two generations differ dramatically in age, they have a few similarities. They witnessed and embraced the rise of technology. They said yes to cynicism (they made "Reality Bites" and Daria popular) and no to clear Pepsi. And in the process of shifting from adolescence to adulthood, they accumulated a lot of debt. So much debt that when you combine the two, X and Y may as well be renamed: Generation Debt.

According to a recent article from Investment News magazine, "three quarters (of Americans under 35) owe as much or more than last year." The article refers to a new study by Qvisory which surveyed Americans under 35 on their financial status. The survey found that those under 35 were struggling with a myriad of financial issues including debt, medical costs and an inability to pay beyond the monthly minimum payments. Because of their financial concerns in other areas, only "33% said they have a retirement plan."

Generation Debt is in need of a plan. Greg Salsbury, executive president at Jackson National Life Distributors LLC of Denver, says "(Generation X and Generation Y) will need to save more money than other generations did." Unlike previous generations, Generation Debt most likely will not receive the extensive Social Security coverage their grandparents generation enjoyed. In a different Investment News article, Lisa Shidler says that "67% of (young workers) said that they had less than $20,000 in retirement savings." With present debt mounting and no retirement plan in site, what are Gen-Xers and Gen-Yers supposed to do?

Investment News recommends that young adults seek assistance from a financial planner. If you are a part of Generation Debt, or you’re just looking for some assistance with your finances, WISER has some tips to help you choose a financial planner:

• Read the financial section of the newspaper, look over the ads and call three local investment firms and ask them to send you materials. After reviewing the materials, set-up interviews with financial planners at a few investment firms.
• Interview two or three different financial advisers. Make a list of questions about whatever you are interested in or do not understand in preparation for your meetings. Ask as many questions as you need.
• Beware of someone who promises too much. Find an advisor who will help you develop realistic measurements of success, and who will explain what he or she is recommending and why.
• Look for a financial planner who talks with you about risks, and what you are or are not comfortable with. You want to find someone who listens to you and understands you.
• Ask the advisor how the services he or she provides are paid for and how fees are calculated.
• Find an advisor who will design a realistic and well-diversified investment program for you

References: "Americans Under 35 Piling Up Debts" from InvestmentNews.com, "Younger Americans Not Saving Enough for Retirement" from InvestmentNews.com.

Bridging the Confidence Gap

"And if Prince Charming does come along, he may have his own financial challenges. Heck, his horse is likely to be leased." -Michelle Singletary, Washington Post

A new study by The Hartford Financial Services Group and MIT AgeLab called "Why Women Worry" found that women are more worried about inflation, health and outliving money than men. Considering that, in comparison to men, women make less money, live longer, and are more likely to take on caregiving roles, it is not surprising that women worry more about their financial futures, especially given today's economy. A poll by the National Women's Law Center that was mentioned in "The Color of Money," a recent Washington Post article, draws a similar conclusion: women are more likely than men to feel that they are falling behind economically. The article also brings up an interesting point based on a recent Prudential Financial study- that women lack confidence when it comes to handling finances. We spend a lot of time talking about the wage gap, but what steps do we take to close what Prudential Financial calls "the confidence gap"?

Remember the song "If I had a Million Dollars?" Well, if I could rewrite the song, I might change the lyrics to "If I had a million dollars, I would buy you long-term health care insurance, pay for your education, open an IRA, maybe even hire a financial planner." Yes, I would like an exotic pet (like a llama or an emu) and a tree fort with a refrigerator. But like most women, I'd rather be financially secure and worry free.