In a recent study by Allianz, more than half of all women see themselves as the ‘Chief Financial Officer’ of their home. This shouldn’t be surprising as more and more women are becoming financially independent, as well as becoming the primary breadwinner in their family.
With this change in family dynamics, it’s important for women to get the financial education they need to handle their family’s finances and make sensible decisions about investing and retirement. However, the same is true for most men who are running the finances in their home.
Because money can create a lot of stress and tension in a relationship, feeling empowered and educated is extremely important. If both partners in a relationship are aware of what financial decisions are being made and understand why they are being made, then the chance of disagreements over money can be minimized.
Here are a few ways to feel confident about your finances.
Keep a Budget
It’s important to track your expenses. If you don’t know how much you are spending, you are constantly going to feel stressed about overspending. Taking the time to create a budget and manage your expenses regularly will help you be confident about the money you are spending.
Create an Emergency Fund
You never know what is going to happen in life – someone could get sick, you could lose your job, or you might need to buy a new car. There is no way of knowing when these things might happen. Because of that, it’s important to have an emergency fund of three to six months of expenses. Having this in place should help you feel far less stressed about money.
Have a Retirement Plan
Saving for retirement takes more than just putting money into an IRA every year. It doesn’t matter how old you are, you need to work with a professional to have a plan in place so you can work towards that goal. If you know what needs to be done, you can take the appropriate steps to get there, minimizing the amount of worrying associated with retirement.
Understand Your Insurance Needs
Do you feel confident that you have enough insurance should you need it? If you don’t know the answer to that, then you should make sure you find out. Having someone review your current insurance (health, life, auto, home, etc.) and analyze whether that insurance is enough (or too much) will keep you feeling confident should something happen.
Establish an Estate Plan
Estate planning is not normally an easy topic to talk about. However, if you can establish an estate plan, you will know that your wishes are in place should the worst happen to you or your family. It’s an important piece of your financial life that should be looked at by a professional.
Being confident about your finances and reducing the stress associated with it is more than just knowing you have enough money to pay your bills. If you can feel confident about all of these aspects of your financial life, you will be better equipped to handle your family’s finances.