The Masculine Rules of Managing Money Have Failed Women
The old, masculine rules of managing money have failed women. There, I said it. And I'll keep saying it. The days of budgets (ugh!), spreadsheets, math and building wealth for wealth's sake alone are over. If it was just about the spreadsheets, all women would have beautiful budgets, fully-funded emergency accounts and would be totally engaged in their finances.
Ramit Sethi says it best in his book, “I Will Teach You to be Rich.”
"Personal-finance advice has been geared toward old white men and taught by old white men for far too long."
Let's talk about that and financial inequality.
We can't talk about racial injustice without talking about financial inequality. In the United States, women earn about 80% of income to men. For women of color, it's even less. This Morningstar article has a lot of insightful data.
The article states, "Income and wealth disparities along racial lines have repercussions for all aspects of life in the U.S.: education, health, home ownership, retirement, and life expectancy."
For example, in looking at income in 2018: (Source Economic Policy Institute)
The real median household income for African-American households in the U.S. was $41,692
The real median household income for non-Hispanic, white households in the U.S. was $70,742
This is a huge income gap and it should concern us all, especially for women. Why? When women are equipped to be financially self-sufficient, they are not dependent on anyone else. They are able to leave situations that are unhealthy, mentally and physically, for themselves and their children.
Unless you're truly a numbers nerd, traditional financial planning is b-o-r-i-n-g. Many male advisors simply do not know how to relate to women, they speak in industry jargon and do not make it a welcoming environment for women.
And yes, you're hearing this from someone (me!) who has been in the industry for decades. Are the pieces of financial planning important? Of course. However, they alone are not enough to make it meaningful.
A financial plan, created without lifestyle desires as part of the plan, is just a bunch of boring numbers on a spreadsheet.
In order to live your most inspired life, you need to create a financial plan centered on your personal values, principles and the vision you have for your life rather than creating a financial plan for the sake of money alone.
The Difference in Lifestyle Financial PlanningUnlike traditional financial planning, which focuses on products and investments, there is a different approach, a feminine approach, a lifestyle financial planning approach that identifies your dream, builds it into a vision FIRST and then gives you the vitality to build a financial plan (the numbers) to bring it to reality.
Keep in mind, this isn't about building wealth for the sake of money. It's creating a plan based on what your dreams and lifestyle mean for you.
1. Imagine you are financially secure, you have enough money to satisfy all your needs now and in the future.
What does this look like for you?
How would you live your life?
Would you change your life and how would you do it?
2. Imagine your ideal day.
Describe your ideal day, hour by hour. How do you spend it if you have all the resources you need to live exactly as you like determined by you and you alone.
Last week, I posted about creating your lifestyle vision for midlife, which is the first step. Without vision, the numbers don’t mean anything.
We also need to pay attention to our habits, behaviors and emotions when creating our financial plans.
Let’s start there. What is the vision of your life for you, defined ONLY by you? What are you working toward that is your total happy space where you envision spending days, weeks, months and years?
Step 2: Your Financial PlanNext, we build the financials around your lifestyle plan. This is where the numbers come in and where they now have true meaning. This is where it’s not boring any more.
Step 3: Your Legacy PlanRegardless of what you own, a comprehensive estate plan is essential to protecting your legacy. In the coming weeks, we’re going to talk a lot more about this; what it is, what it isn’t and the 3 biggest myths surrounding legacy planning.
Until next time,
* According to a 2014 Prudential study, Despite the lessons of the 2008 financial crisis, women feel no better prepared to make wise financial decisions today than they did a decade ago. Only 21% felt very well prepared then; just 20% now.
Patty Bonsera, CFEI, is a former Securities Trader who became a Financial Wellness Advisor to women 40+. In an industry built for men, she founded Fear.less Girl Financial as a better way for midlife women to have financial clarity, confidence, and wellness. She will coach you, teach you, and celebrate with you every step of the way.