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Out of Control: The Savvy Gal’s Guide to Financial Security

Can anyone really be in control of anything- especially our future…

Most mornings I wake up early, take a few moments for myself and read inspirational words that set the tone for my hopefully productive day. One quote I encountered recently really hit home both personally and professionally.

“A woman who controls her finances controls her future.”

As I pondered this quote, I realized that the sentiment expressed in these words has been a guiding principle in my own life. No matter my personal circumstance (single, married, divorced working mom), no matter the relative peace or chaos in my home, no matter the level of my paycheck, I have had confidence in my ability to understand and influence my personal financial situation. This quote revealed to me that my ability to control my finances has given me the confidence to believe that I can in fact shape my destiny. I know that decisions I have made in my life, even risky ones have been made with more confidence and freedom because I have control over my financial situation.

When I discussed this quote with my friend, Elizabeth, she laughed and replied, “Really Molly that is easy for you to say. You are a financial planner. Of course, you are in control of your finances. I have 4 kids, a busy husband, many responsibilities outside the home and a cursory knowledge of the financial world. I don’t feel I am in control of anything- especially my future.”

Elizabeth’s view is a common and understandable one. Elizabeth is intelligent, well-educated and engaged, but the common stresses of her daily life have pushed her finances to the bottom of her “to do” list. I believe that with a few actionable steps Elizabeth (and anyone like her) will come to see the security and indeed the power that comes from being in control of your finances. UBS found that of married women, 56% leave long-term financial planning and important investment decisions to their husbands, and 85% of women who defer to their husbands believe their spouses know more about financial matters. Odds are the married women will be on their own at some point due to longevity or divorce. And, odds are that he may know a thing or two about investing but that is just one piece of the overall financial planning picture that her future (and their family’s future) depends on. Taking control of your finances should be a priority. You wouldn’t knowingly leave your child’s college decision or even your next summer vacation to chance. So why would you leave your financial future up in the air

Let’s start with what does it mean to be in “control”? It simply means that you have the authority to guide or directly influence something. How can someone who isn’t a financial planner develop financial acumen and aptitude to have the authority to guide their finances. You start by being informed. Below are a few ideas that you can put into practice today.

Assess Your Finances

Take stock of your current situation. If you don’t have this already, make a list of all your assets, investments and current holdings. Offset that with any reoccurring payments, debts or upcoming obligations. Doing a quick financial assessment will be the best way to understand where you are today in terms of controlling your finances. Add this step as “repeating event” on your calendar monthly. We also have a behavioral tool that incorporates this daily which can even yield more discipline and motivating results.

Goal Setting

Goal setting may sound trite, but it is an excellent starting point toward gaining control of your finances and your future. Discussing and stating your short- or long-term plans for your life help you understand what financial goals you should set. This step can be especially meaningful if you aren’t the primary breadwinner for your family. Setting financial goals with your partner will ensure that you are on the same page and that you are both taking an active role in your financial future.

Budgeting

Spend some time each month making and reviewing a budget. The act of setting and keeping a budget, whether your financial situation requires it or not, will give you (and your family) a greater understanding and feeling of control over your finances. By reviewing your budget regularly, you can understand if you are putting into practice the plans you defined to reach your financial goals. Following a budget also give you the freedom to buy a fun, splurge item (trip abroad, statement bag, top quality paddleboard, insert your current dream item here) without the dreaded guilt of “Can I afford it?” weighing you down.

Financial assessment, goal setting and budgeting should become something you do out of habit-like brushing your teeth, giving your dog his flea medicine, scrolling through Instagram. Making these steps part of your monthly routine will bring a sense of control and order to your life.

Investing

Review your investments with your spouse and/or your financial advisor on an annual basis to make sure that your investment strategy matches your future goals. As we age, and life events occur, our investment strategy must be altered. This step may be tricky if you don’t have the time or interest to learn about investment options. A trusted financial advisor can help to educate and guide you toward the most appropriate investment strategy. Seeking Alpha conducted the Vanguard Study regarding the quantitative difference an advisor can make.

Insurance Coverage

In life, there are a few things that are beyond our control. Life events like illness or natural disasters simply cannot be predicted. Holding the appropriate insurances are the one method a prepared adult has to mitigate the risk associated with these unexpected occurrences. Choosing the proper insurances might also seem overwhelming. Again, this is an area where you might utilize a financial advisor to assist you in putting together the most appropriate package of insurance products to meet your financial needs.

Below are some additional resources I would recommend to assist you in the steps outlined above and increase your financial awareness:

Books

Profit First for harnessing the income of an entrepreneur and can also be translated into your household income. Very powerful.

The Millionaire Mind for validation that the wealthy aren’t what media portrays and that if these everyday folks can achieve wealth, so can you.

Podcasts

The Clark Howard Podcast – practical money saving ideas for wise money management.

Notice how none of these recommendations are “The Wall St. Journal” or Kramer’s “Mad Money”. While I read WSJ and have read Kramer’s biography, the power of financial planning is 2 parts behavioral and 1 part technique. Financial know how isn’t necessarily what people think. Searching for answers to your financial success are within yourself and then the coordination of your 5 areas of: risk management, taxes, retirement planning, estate planning and investments.

Taking control of your financial future does require a bit of effort and time. However, either on your own or, with a financial advisor and an estate attorney, you will see that adding some discipline around how you think about and review your finances will alter how you feel about your level of control. You can leverage that financial control and peace of mind into feelings of more control in your day to day life and in your future. You will be more willing to take that trip you have been putting off or try that new business venture that has been a whisper in the back of your mind. You will be surprised what you can accomplish when you mind is free from worry and focused on your future. Discipline, not the next “Bitcoin” or tech start-up, yields the best returns when it comes to personal finances.

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