Having A Plan Is Crucial!

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With the roller coaster ride defining the stock market lately, it’s no wonder concerns about financial planning are a top priority for many people. Statistically, women make up over half the population and control $22 trillion, which is half of the wealth in the United States.

Coupled with our gender’s propensity to live longer and be caretakers of family members, it’s critical to plan for contingencies. In addition, many women find themselves in a difficult spot after an unexpected divorce or a spouse’s untimely death.

Health, wealth and prosperity are more than just greeting card sentiments. So how can you balance financial and health planning? While it may appear no easy feat, there are ways to plan for both. Many brokerage firms offer financial planning specifically for women, so it may work for you to consult with a financial advisor to develop a sound, tailored approach for financial success. If you’re doing it on your own, the following wealth and health wishes provide a solid start.

Take advantage of an employer retirement savings plan. Whether it’s a 401(k) or 403(b), think of it as free money if your employer offers a match. Even if your company or organization doesn’t match the funds you put in, contribute anyway, because it can lower your tax bracket and it’s pretax savings.

Build up your emergency fund. Bad things happen to good people, so plan ahead. Start with a goal of reaching $1,000. After that, work toward saving three to six months of your regular living expenses because life can throw you a curve ball. In the event you become unemployed or have roof repairs, this fund will be your cushion.

Manage or pay off any high debts. Devise a reduction strategy to pay off high-interest credit cards and loans. Once you have your emergency fund set up, focus on debt reduction; high interest debt equals high cost.

Pay yourself first. Even if it’s only a small amount, it can add up. Automate weekly transfers from your paycheck to your savings or IRA account to ensure you build up a reserve.

Be properly insured. Investigate employer-paid life or disability insurance to cover potential funeral costs or living costs if you become unable to work due to an accident. Re-evaluate existing life insurance policies and make sure your beneficiaries are updated, which is crucial in the event of life changes.

Our health is the other piece of the planning puzzle. Even if you enjoy good health now, no one has a crystal ball to predict the future. That’s why preparation is key. No matter what stage of life you’re in, whether working or retired, single or married, proper planning will empower you and boost your independence. Let’s explore some basic tenets here.

Choose a health care proxy. Be sure a family member or close friend is designated as a health care proxy who can make decisions in your name should you become incapacitated. Also, ensure that your final wishes are well documented.

Pass along wealth. Estate planning is important for women. Divorce and death factor into the equation here. If you were to die suddenly, what would happen to your investments? Further, if you have children and they are still minors, who would be their guardians? What about if you were divorced? The independent woman who manages her money might inadvertently be setting up her children for potential pitfalls because the ex-husband might wind up managing money on their behalf. In other situations, spouses remarry, and poor planning can impact family members.
Think of longevity and long-term care. Who will take care of you in your old age? Evaluate your family history; think Alzheimer’s disease or Parkinson’s. Investigate a long-term care policy or a more affordable LTC rider attached to a life insurance policy.

Preplan burial expenses. Planning ahead for your funeral will save money and save your surviving family members enormous heartache. If you should pass away unexpectedly, those you love and leave behind are burdened with picking out a casket or deciding on cremation in a hurried manner. While this conversation might be a difficult one to have, it’s best to sit down and discuss while you’re healthy, of sound mind and fiscally able to plan ahead.

Take care of yourself first. This may sound selfish, but you can’t help others, whether they’re your aging parents or your young children, if you don’t take charge of your own welfare first. Women are often sandwiched in between generations and serve as caretakers for both. That’s exhausting! So be sure to take care of yourself along the way. That translates to eating right, exercising and getting adequate sleep.

Here’s to wishing you good health, wealth and prosperity!

Sources: clevergirlfinance.com, fidelity.com and jpmorganchase.com.