March 2020: Mindful Financial Planning: 6 Tips in Celebration of International Women’s Month
By Marguerita Cheng, CFP® • CEO, Blue Ocean Global Wealth
With March being International Women’s Month, when it comes to financial planning women certainly have something to celebrate. Around the world, as illustrated in the photo here from a reception at Downing Street, we are joining forces.
With this global change, long gone are the days of letting our husbands do all the planning and investing. We are now a prominent component of corporate America and the global business landscape. Our emergence as leaders, entrepreneurs, and innovators has made them an integral part of our country’s economic health and the future of global business. I’m proud to say that women are taking stewardship of family and business finances. Women also are often seen as intuitive, thoughtful and compassionate, and can use these qualities to their advantage as they plan for the future.
Here are areas to be mindful of:
1. Let go of baggage. We all make financial blunders; it is part of being human. A dodgy business deal gone askew or personal mistake such as paying a late fee on credit card can happen. But sometimes women take such mistakes as evidence that they are incompetent when it comes to financial management. Nothing could be further from the truth. Think of each day as a new beginning; nothing is permanent or beyond correction.
2. Take money lessons to heart. Women need to understand where their attitudes and habits about finances come from, and where necessary, write another story. For example, as a young girl you may have watched your father gamble money away or spend foolishly as your mom remained quiet. This could be an inspiration for you to be more assertive in matters of the wallet.
3. Recognize your needs and motivations. Money is a major motivational factor. Some people view it as a sign of status or defining success. To be mindful, women need to understand what motivates them to both spend and save money. Be realistic about your needs and wants, and identify and prioritize your financial goals.
4. Don’t lose sight of what you value. The financial choices we make determine what’s important. Buying the latest designer bag for example, may sound like fun, but take a step back and think about how you want the future to look. Will making this purchase place your financial independence or retirement savings at risk?
5. Consider how others may impact your finances. Women also often put others’ needs ahead of their own. For example, a friend of my family is a 68-year-old widow who recently lost her husband to ALS, and is currently caring for her 99-year-old father. She also raised four children –which implies that her work history may be shorter due to family responsibilities. This, in turn, has likely impacted her retirement savings and the amount of her Social Security benefits. Think about the details of your own situation and how it might affect your financial planning now and in the future.
6. Don’t ignore risk. Market risk describes the fluctuations in security prices as a result of market activity and expectations. But market risk is not the only factor that can affect your balance sheet or financial well-being. Because women have longer life expectancies and often lower retirement account balances than men, they also need to be mindful of inflation risk and longevity risk. For this reason, it is important that women do not invest too conservatively. Age 60 is the new 40. Take my grandmother, who lived to be 94 years old: she was eating Greek yogurt and doing yoga in the ‘70s before it became cool! Trends change and so do demographics. Mindfulness can help everyone—especially women—become better investors and plan for financial security.
About Marguerita M. Cheng: The founder and Chief Executive Officer of Blue Ocean Global Wealth is a regular columnist for Investopedia & Kiplinger, and has worked as a spokesperson for the AARP Financial Freedom Campaign. Prior to launching her firm in September 2014, she was a Financial Advisor at Ameriprise Financial and an analyst and editor at Towa Securities in Tokyo, Japan.
She is the recipient of the Ameriprise Financial Presidential Award for Quality of Advice and the prestigious Japanese Monbukagakusho Scholarship. In 2017, she was named the #3 Most Influential Financial Advisor in the Investopedia Top 100, a Woman to Watch by InvestmentNews, and a Top 100 Minority Business Enterprise (MBE®) by the Capital Region Minority Supplier Development Council (CRMSDC).
Marguerita’s certifications include: CFP® professional, Chartered Retirement Planning CounselorSM, Retirement Income Certified Professional® and a Certified Divorce Financial Analyst. As a Certified Financial Planner Board of Standards (CFP Board) Ambassador, Marguerita helps educate the public, policy makers, and media about the benefits of competent, ethical financial planning. She serves as a Women’s Initiative (WIN) Advocate and subject matter expert for CFP Board, contributing to the development of examination questions for the CFP® Certification Examination.
She volunteers for several organizations including: CFP Board Disciplinary and Ethics Commission (DEC) hearings, she has also served on the Financial Planning Association (FPA) National Board of Directors from 2013-2015 and is a past president of the Financial Planning Association of the National Capital Area (FPA NCA). Click here to learn more about Blue Ocean Global Wealth.
Thoughts, questions? Click here to contact Marguerita today.