The greatest gift you can give your children is your own financial security. Take care of your own retirement planning, life insurance needs and debt reduction before contributing to your child’s college savings plan. If you have the excess funds to contribute at that point, 529 College Saving Plans are a tax-efficient, flexible tool in helping to prepare for the cost of your child or grandchild’s education.
Information is power. As hard as it is to sit down and focus on your finances (especially when you know the news will be depressing), there is no easy way towards financial power. Isolating your basic living expenses, and then factoring in debt pay-down, savings rate, and luxury spending will empower you to live below your means, thereby creating true financial security.
Mutual funds are confusing to people because they are not explained clearly. They are actually quite simple. A Mutual Fund is like a shopping cart of investments. When you go to the market, being the fabulous Domestic Engineer that you are, you know which products are the best value for the best price, don’t you? We are know our favorite bread, the best ice cream, the freshest lettuce and our favorite wine. We notice when those products go on sale, and we also notice when their prices go up. The money managers in charge of the portfolios of mutual funds are doing that same kind of shopping, just in the world of stocks and bonds.
Everybody wants to create financial success. This is a basic tenet of our society, a message taught to us from a very early age, and reinforced through the media, our families and our own pocketbook. Financial success can come from many sources, it can be the result of a well thought out plan, implemented over many years, it can come in the form of an inheritance, a new business or a divorce settlement. Regardless of how it is achieved, we are ingrained with the notion that having lots of money equates success, freedom and influence. Much of this is true, and creating wealth and security is an incredibly empowering experience.
The field of Psychology and Money is a deep and fascinating one. We don’t need a PhD in Psychology to see some basic trends in our behaviors, our internal stories from our family of origin, and the attitudes we have towards money today. We all recognize ourselves at some point in the descriptions above. Now that we’ve begun to identify some of our self-destructive behavior in relationship to money, it is time to turn those dynamics around 180 degrees, and create a loving, healthy relationship with our money, as with a loving partner.
Women are becoming more educated about personal finance then ever before. We are climbing the ladder to the top of all professions, caring for elderly parents, sending our children to college and managing investments and real estate. However, there is still a gender divide in personal finance; many women feel nervous about managing their own money, defer to their husbands on all investment decisions or feel uncomfortable asking what they think will be “dumb” questions about investing. There is an enormous need for financial education that is accessible to women, as they are hungry for the knowledge they need to manage the issues that are arising in their lives. Our natural instinct to protect our families and ourselves needs to be applied to our own financial life. We are in charge of our own future, and the same concern we have for our loved ones we must have for ourselves.