Financial Planning for Women in 2021 – The Ultimate Guide

The days of husbands handling all the family’s finance are long gone. Women are now an integral part of the business world and the global economy.

According to research, a woman is paid 54 cents for every dollar earned by a man on average. Analysts estimated that this gap would take more than 200 years to close.

This is a call to action for women to take extra measures in achieving their financial freedom.

Whether you are preparing for your post-retirement future or simply wanting to ensure your nest egg remains healthy, financial planning is the way to go.

Financial planning for women is essential for their present and future happiness. In fact, it affects many areas of your life.

Women often face the challenging task of juggling jobs, raising children, and managing families, making it difficult to stay on top of their finances.

But having a plan in place will help you get ready for anything that comes your way and provide a path to success in your life.

Though financial planning for women may seem overwhelming, it doesn’t have to be so. With the correct information, you can develop your plan and be financially secure for life.

Here we discuss all you need to know about financial planning for women to help you make an informed decision.

Before then, let’s first understand the concept of personal finance.

Table of Contents

Understanding Personal Finance

Financial planning for women cannot be fully understood without first understanding personal finance.

So what is personal finance?

Personal finance is an umbrella term for a wide range of issues that deal with your wealth and how you manage it.

It covers your income, your expenses, your investments, taxes, mortgages, debt, and budgets and so on.

Personal finance’s main goal is to set yourself up for success by managing your resources to make sure you achieve your future goals. It has become an increasingly important aspect of life, influencing both the present and future.

Personal finance is essential for women because it forms the foundation upon which you build your dreams.

Personal finance isn’t just about managing money. It’s also about having financial security so you can enjoy the life you want to live within your means.

According to research by the National Institute on Retirement Security: “Women are 80% more likely to be impoverished in retirement.”

Why? Because of ineffective or absence of personal finance.

So how do you manage your finance more effectively to secure your present and future? The answer is simple: through a financial plan.

In Canada, a woman’s average life expectancy is 84 years. If that were your lifetime, would you want to be able to spend your golden years enjoying life or fending off bills, or both?

A financial plan helps you plan for the future in a way that supports your lifestyle and guarantee your happiness.

What is a Financial Plan?

A financial plan is a written document that describes your current financial status, future goals, and the specific steps you need to take to meet your goals.

A financial plan is a map that shows you where you are today, where you want to be in the future, and how to get there.

Some women are working hard, but they’re unsure if they are headed in the right direction. Understanding where you are and where you want to go can help put your decisions into perspective.

A financial plan includes the major elements involved in planning for your future, such as income, expenses, investments and more.

Just like a car needs regular maintenance, so does your finances.

A personal financial plan is an opportunity to develop strategies that have a real impact on your finances. It helps you organize your financial goals, evaluate your progress and think proactively about the future.

A financial plan also helps you identify the purpose of each money you earn, make amendments to your spending habits and enable you to have a better standard of living.

With a financial plan, you can more easily achieve your goals and maintain your freedom as a woman.

Financial planning for women helps you avoid making decisions based on emotion, lets you prioritize what matters most to you, and allows you to take proactive measures to manage your wealth.

What are the Features of Financial Planning?

  • Simplicity: Simplicity is the key to effective financial planning. A good financial plan is simple and straightforward enough for you to understand and implement it effectively.
  • Clear Objectives: Objectives are the results of financial planning. Clear Objectives will help you set very attainable goals for your future financial position.
  • Foresight: Seeing beyond the present helps you understand the implications of current actions for the future.
  • Flexibility: Flexibility can be the difference between a successful financial plan and one that is not. This has to do with the capability to modify a financial plan when necessary.
  • Solvency: Solvency is the ability to meet one’s financial commitments when they fall due. This is achieved when your current assets exceed your current liabilities.
  • Profitability: Profitability means making more money. It is the principle of earning a return on your investment. Your financial plan should be profitable.

What are the Types of Financial Planning?

Woman Planning Her Financial Life & Wellbeing
Cash Flow Planning

Understanding exactly how much money you have coming in and going out is vital to achieving your financial freedom as a woman.

Cash flow planning helps you ensure that you have adequate cash flow in place to meet both your short-term and long-term needs.

Therefore, cash flow planning aims to optimize your cash flow in ways that fit your lifestyle and spending habits.

Investment Planning

An investment planning approach aims to ensure the most suitable investments are made to achieve a financial goal.

You can choose different types of investments that suit your risk tolerance and time frame.

This type of financial planning ensures that you know the risks involved and the kind of returns you can expect over the long term from your investment.

Insurance Planning

Insurance planning enables individuals to protect themselves from the loss of assets from uncertain events. It involves saving money to protect your family’s financial position in case of a disaster, medical expenses, or other unforeseen events.

Insurance planning may include various kinds of insurance plans such as health insurance, life insurance and car insurance etc.

Retirement Planning

Retirement planning is a type of financial planning focused on helping you save enough for your retirement years.

Planning for your retirement is one of the most critical aspects of your financial future.

It should be a goal to strive for even before the end of your career since nothing is certain regarding life’s circumstances.

Tax Planning

Tax planning helps in the efficient use of resources and minimizes tax liability to meet your needs.

This is done by taking advantage of any existing loopholes in the system and minimizing the burden that you would otherwise bear due to taxation.

By preparing properly for taxes, you could be able to save hundreds of dollars on the amount of money that you hand over to the IRS each year.

Real Estate Planning

Real estate planning is a type of financial process that focuses on real estate.

The type of real estate planning you need will depend on whether you are looking to acquire or sell investment properties.

Real estate planning involves the costs of hiring a real estate agent or lawyer, the estimated tax liability and the cost of handling the entire process of real estate.

Children Future Planning

Are you planning for the future of your children? Are you considering their education, career, and financial ambitions? Children’s future planning is what you need.

Many parents struggle to raise their children and work hard just to buy what they need.

However, taking time to make their child’s future secure and prosperous will surely give them the peace and joy that they deserve.

Why is Financial Planning Important for Women?

Lady Financial Analyst
Cash Flow Management

With maternal and child care expenses, mortgage or rent, and the cost of food and clothing, fluctuating income can be a severe obstacle for women.

Managing your cash flow allows you to build savings and invest in the future.

A new stage in life, a professional change, or a pre-retirement transition may be sending you into unchartered territory regarding financial management.

Women have less time to prepare for retirement compared to men due to life expectancies. However, you can overcome this obstacle by implementing a financial plan.

When you don’t have time to manage your cash flow, you could find yourself not being prepared for necessities such as medical expenses.

Understanding your cash flow will help you better manage your finance and prepare for your retirement.

Cash is important because it gives you the flexibility and freedom to make the best decisions for your needs and goals.

When cash flow is managed well, we can adequately plan for college expenses, save for retirement and even give back to their communities for the betterment of others.

Increase in Capital

Whether you are working in an organization or running your own business, capital is one of the most important aspects that you should be concerned about.

Financial planning is important for women as it improves their capital base, which will increase income, savings, the standard of living, and happiness.

Financial planning for women helps increase the capital used to purchase property and other valuable things.

This increased capital will play a crucial role in women’s financial independence and a prosperous future.

Women may earn a lower amount compared to their counterparts, but proper financial planning will make them grow wealthier in the long run.

Having sufficient capital will give you financial independence. When you are financially independent, it means that you are no longer dependent on other people for your needs or wants.

Family Security

A woman, especially after marriage and the arrival of the first child, is often faced with financial decisions that require a great deal of careful thought and planning.

The need for family security in money, health care, food, clothing and shelter becomes paramount.

Because of their caring nature, women may often have to put their dreams or passions on hold to keep the family safe financially.

Financial planning helps you meet your family’s needs and secure a better future.

For a woman, her family is her primary concern. If things are not going as expected, she may not focus on her career or other things.

Financial planning for women is particularly important because it provides a structure that will enable you to make better decisions for your family security.

When you plan for a secure future, you feel safe from unexpected budget shortfalls that could hamper your family security.

By implementing a financial plan, women can take several necessary steps towards ensuring their family’s security.

Better Standard of Living

Every woman has a dream to achieve the best standard of living for her family.

With an effective financial plan, women can say goodbye to a poor living standard and embrace a better standard of life.

A woman who plans her finances well tends to have a better living standard than her peers who have no financial planning in place.

The transition of children and the arrival of grandchildren are two important events in women’s life cycle.

These can lead to significant income and expenditure changes, making it essential for a woman to prepare for these events through proper financial planning.

Proper planning can help achieve a better standard of living, particularly at the later stages of life.

Allocating money towards important things is a smart decision as it helps you achieve a better standard of living.

Financial planning for women helps you manage your money in a way that lets you have greater control over your standard of living for yourself and your dependents or family.

Cost-Effective Budgeting

Developing a financial plan enables you to save money and reduces your anxiety in meeting your financial goals.

Knowing that you have well-thought plans is more likely to improve your motivation and eventually help you use your money wisely.

Financial planning for women helps you to achieve your goals and targets within a given budget with ease.

It can also keep you away from massive debts and any other type of expenses that deplete your wealth.

The rising prices of goods, services and other essentials can make you feel that your money is leaking away.

Budgeting is the most cost-effective way to maintain control of your financial health.

An organized financial plan could help a woman make informed decisions regarding spending and allocation of her resources.

By tracking your expenses and income, you can readily identify areas where you need to reduce spending and save more money.

Prepared for Emergencies

What if you became ill and needed emergency care? How would you pay for it? What would happen if a car or home repairs were required or the water heater broke?

Financial planning helps women make informed decisions so that they can adequately plan for unforeseen circumstances.

Once an emergency strikes, your financial position can be severely affected.

So it is important to have a well-prepared strategy to help your family through any unforeseen crisis.

A little bit of preparation can give you the chance to recover quickly from even the most difficult situations.

Financial planning for women helps you make the best of your resources by focusing on managing your finances adequately and developing a safe financial future.

Knowing up front that your financial situation will be okay will put your mind at ease if something goes wrong.

Peace of Mind

Life is about more than just making money. Financial planning for women is key to long-term peace of mind.

Financial planning is important for women as they deal with more daily pressures such as raising a family, worrying about family members’ health, maintaining their home and relationship etc.

When you start planning early in life about your career, saving for retirement, buying a house, it gives peace of mind.

You won’t have to worry about being stuck in a bad financial situation when you’re older since you have already planned for it.

Financial planning can reduce your dependence on luck and minimize uncertainties in your financial life.

A sound financial plan shows you where the money goes and how you can save and invest for what matters.

Financial planning helps protect your assets so that your emergency funds will preserve what’s important to you when unplanned events occur.

How To Do Financial Planning for Future?

Business Men and Women in a Meeting
Step 1: Understand Your Current Financial Situation

Financial planning for women is all about how today’s decisions affect tomorrow’s financial condition of women.

To plan for your future, you must first create a comprehensive picture of your current financial situation.

So how exactly do you gather information about your current financial position? All you need is information about your current:

  • Money
  • Assets
  • Debts

Situations in life change over time. This also applies to financial planning for women.

You should take regular stock of your financial situation to ensure that you are on track and understand where you stand at any point in time.

Once you understand your current financial situation, you can start setting future goals.

Step 2: Develop Your Financial Goals

The second step in effective financial planning is developing your financial goals.

If you don’t have goals, how can you achieve them? It is important to know what your financial goals are as a woman.

To achieve these, ask yourself the following questions:

  • What are your short-term and long-term goals?
  • What are your plans for your children? Or
  • What do you want to achieve before or after retirement?

Establishing these goals will make your plans more clear. One of the most important points here is to put a timeline for each goal you have.

Your financial goals should be realistic, appropriate for your age, needs, lifestyle, family situation, etc.

Goals are the point that your whole financial plan will revolve around. By identifying your financial goals, it will be easier for you to identify alternative courses of action.

Step 3: Identify Alternative Courses of Action

After you have determined your financial goals, you are now ready to go through all of your possible courses of action and decide which one is best for your situation.

Explore your options closely by identifying different alternatives and choosing the one that fits your situation.

Planning for the future is not something to be taken lightly in any situation. Different financial conditions require different courses of action.

It is important to identify as many courses of action as possible and document them in your financial plan.

These can be anything from putting off major purchases, like a house or a car, or switching to a smaller house because your family income will go down once children enter the picture.

Step 4: Evaluate Alternatives

One of the most important steps in doing financial planning for women is evaluating alternatives.

An alternative is any action or inaction you could take at this point.

It is important that you explore and evaluate all of the alternatives to achieve the best solution.

Understanding the possible consequences of each alternative is essential in evaluating your alternatives.

For each option, identify the advantages and disadvantages rigorously and in detail.

To succeed in evaluating your alternatives, ask yourself the following questions:

  • Which alternative will be the easiest?
  • Will it cost more or less?
  • Will it take more or less time than another alternative?
  • Is it within your reach?
  • Do you like it better than the next best alternative?
Step 5: Create Your Financial Action Plan

As a woman, to secure your future means to take responsibility for planning and managing your finances wisely.

In this step, you will create an action plan that details how you will manage your personal finance.

Your financial action plan is your guide to executing your financial plan and achieving sustainable wealth.

Your financial plan will be based on several considerations, which will vary depending upon your circumstances.

Creating your financial action plan involves setting practical steps that will help you attain your financial goals.

To achieve this, you need to list all your expenses like car loans or mortgage payments, transport expenses and other bills.

Identify those expenses that are not essential and cut them out. This is a cost-effective strategy for financial planning for women.

The more precise your financial action plans, the easier it will be to understand their implications and implement them.

Step 6: Implement Your Financial Plan

You’ve got it all worked out, and now it’s time to implement.

Creating a financial plan is only part of the equation; to achieve your goals, you need to implement and stick to that plan.

To implement your financial plans, you will have to take action on the decisions you have made.

The implementation phase of the plan defines who will do what and when on financial planning for women.

This helps you keep track of your finances by making you aware of your cash inflow and expenses and making appropriate adjustments to stay on the path that leads to success.

It requires effort and time from your side and constant monitoring for this to be successful.

Step 7: Reevaluate and Revise Your Plan

Reviewing and revising your plan at least once a year is crucial. As your life changes, so will your financial goals and needs.

Changes in family status, the number of assets you have, purchasing a new home or business, or even investment successes or losses are all reasons to review and revise your plan.

Your financial plan should be evaluated and revised at regular intervals to check if the current financial situation conforms to it or not.

If it confirms, it is an indicator that you are progressing well towards achieving your financial goals.

But if your financial plan is not aligned with your current situation, then it is an indication that something needs to be changed and revised to ensure that you attain your financial goals. 

5 Sure-Fire Tips on Financial Planning for Women

1. Build an Emergency Fund

According to research by CNBC, 85% of women live paycheck to paycheck, which is roughly five times as often as their men counterparts.

This portrays an alarming rate of danger because life is full of surprises, and many of which are not pleasant.

No matter how stable you think of your finance, you cannot be sure of the cost of unforeseen emergencies.

An emergency fund can give you some peace of mind that you won’t have to put things on credit to handle a surprise or project.

But how much do you need to save?

Most experts agree you should aim to keep 3-6 months’ worth of living expenses saved in case of a financial emergency.

However, depending on your circumstance, you can decide to save even more than that to survive the rainy days.

2. Invest Your Money

If you want more money in the future than you have now, you need to invest your money.

Whatever earnings you have, take a set amount out for savings.

That way, you will never be tempted to spend all of your money on frivolous items that do not directly affect your life and well-being.

All investments are risky. However, the risk factor can be diversified by investing in various asset classes.

By investing in different items, you can save for your future goals hassle-free and without having to worry about a sudden slump in the market or any other financial crisis.

For that, you need in-depth knowledge about how the capital markets work before you invest.

3. Pay Off Your Debt

It is significant to manage your cash flow well to owe nothing to anyone when you retire.

Paying off your debts is the key to removing the shackles of debt hanging on you and allowing you to experience financial freedom.

You don’t want to wake up one day and wish for one magical credit card to give you all the opportunities money can buy.

There are numerous ways of going about paying off your debt. Your aim is to follow any means possible to be debt-free.

Learn how to get that debt paid off so you can concentrate on a sound financial plan.

4. Live Below Your Means

The key to financial success is a simple formula: live below your means. This perfectly applies to financial planning for women.

Whenever you want to make a purchase, consider whether you need it. If not, then don’t buy it.

By so doing, you’ll save more money and stop the cycle of debt before it ruins you.

The 50/30/20 rule is one of the easiest ways to live below your means, helping you utilize your money on things that matter. This rule states that:

  • You should spend 50% of your after-tax income on obligations, necessities and nice-to-haves.
  • At least 20% of your after-tax should income should go into savings and debt repayment.
  • You should spend 30% of your after-tax income on everything else. 
5. Build Confidence in Yourself

One of the biggest challenges affecting financial planning for women is the lack of self-confidence.

It’s easy to feel overwhelmed when you don’t know what you’re doing.

Don’t let the unexpected happen. Start making plans today for your financial future. Think of money as a weapon against future uncertainties.

It’s time that you stop listening to what others are telling you about how much money you should be making.

It’s time to get your financial act together and build confidence in yourself! You know best what your situation is, so now is the perfect time to start working on the numbers.

To this end, you may need to hire a personal finance coach to assist you in building confidence and planning your finance.

Who is a Personal Finance Coach?

A personal finance coach is a financial expert who guides, advises and assists you with planning and managing your finances, helping you achieve your financial goals.

It pays to have a good understanding of financial planning. If you do so, you will be able to embark on the journey towards financial freedom.

A certified personal financial coach can help you develop your best plan to save money and reach your financial goals.

A personal finance coach gives you proven strategies that cut your expenses and boost your income.

Also, a personal finance coach helps you set goals, eliminate financial debt, prepare for the future, and find strategies for living your best life.

By working with a personal finance coach, you will have confidence and assurance that you are going in the right direction.

Whether you are just starting to plan for your future or want a review, a personal financial coach will consider your situation and create strategies that will help keep you financially secure.

Why Consider a Personal Finance Coach?

Financial Education

With women having lower financial literacy, being educated about finances can be the most important thing you can do for yourself.

You need to learn more about money, manage it, and use it most effectively. A financial coach helps you achieve all of this.

Having a personal finance coach can help you achieve greater levels of practical financial literacy.

Effective Budgeting

If there is something that everyone needs to learn on how to manage their money, it is budgeting.

Budgeting is so important in financial planning for women, but the problem some women face is that they don’t plan their budget effectively.

To be successful in learning how to budget, you need help from someone who has been doing it successfully for years. That’s a personal finance coach.

Financial Planning

Have you ever wished you had another person with an objective and unbiased point-of-view to help you make better financial decisions?

Or maybe you’re just looking for someone who can help challenge your current thinking regarding your finances.

Either way, a personal finance coach might be what you need to achieve your financial goals.

Because personal finance coaches are trained to help with financial planning, you can rely on them for a customized service.

Debt Management

No matter how much you try to keep on top of your finances, things do get out of hand sometimes.

When you’re stuck in a rut with enough credit card debt to sink a battleship, hiring a personal financial coach can be the best move you ever make.

A good personal finance coach can help you develop realistic goals for your money and manage your debt more effectively.

Boost Confidence

Do you feel like it’s impossible to get ahead financially? If so, then it’s time to consult a personal finance coach.

Life often gets in the way, whether it be a job loss, a new baby, or a relationship breakup.

Working with a coach can assure you that you are heading in the right direction to a secure financial future.

This ultimately boosts your confidence and allows you to make better decisions with your money.

How Should I Choose a Personal Finance Coach?

Confirm that You Need a Personal Finance Coach

Should you hire a personal financial coach? That is a question many are asking when it comes to financial planning for women.

To answer this question correctly, you need to evaluate your current financial situation.

If you are comfortable with your savings, retirement planning and overall financial well-being, you may not need to hire a personal finance coach.

However, if you have goals that you are having difficulty attaining due to a limited financial literacy, you might benefit from a knowledgeable coach’s services.

Decide What Services You Need

Before you choose a personal finance coach, it is important to ask yourself: What kind of financial help do you need?

A personal finance coach can offer a wide range of services to help with your money management or to be financially secure in the future.

So it’s important to identify ahead of time what you need from a personal finance coach. This will also determine the cost of hiring your coach.

Whether you’re planning to get a personal finance coach because you’ve got a significant financial problem or as part of your preparation for retirement, be sure you get the best possible service.

Know Your Budget

After identifying the kind of service you need from a personal finance coach, the next step is to how much you can afford.

This way, you won’t waste your time looking through many services that are either too expensive or don’t go far enough to meet your needs.

Of course, one of the questions you need to ask the prospective advisor is what price range they work in.

A suitable personal finance coach can work with your budget to help you reach your financial goals.

Get Recommendations

Regardless of your financial situation, you need to be sure that you choose a personal finance coach with your best interest at heart.

You want a coach who has helped others achieve success in their journey and understands your situation and where you are in your financial journey.

To succeed in this, get recommendations from friends, family members, colleagues or even people in local communities.

Ask those people whether their experiences were positive or negative and why they would recommend this financial coach to you.

If you don’t know anyone who has gotten a good experience with a financial coach, you should research online.

Compare Different Coaches

When it comes to your money, you want someone who will steer you in the right direction and advise you on the right thing to do.

Personal finance coaches aren’t one size fits all. Instead, they have different approaches to helping people reach their financial goals.

The good news is that there are many personal finance coaches that can help you meet your financial goals. All you need is to compare them to make a perfect choice.

When comparing different coaches for financial planning for women, consider the following things:

  • Their credentials.
  • Make sure the coach can help you reach your goals.
  • Make sure you feel comfortable with the coach.
Verify Qualifications

Upon finding a personal finance coach, it’s important to find out about their background, experience and qualifications, as well as the services they offer.

With a bit of research, you can find the right personal finance coach to help you reach your financial goals.

You need to make sure that the coach is experienced in what they teach and confident enough to make quality suggestions.

A quick search on Google may help you assess the qualifications of your potential personal finance coach.

Ask the Right Questions

When deciding to hire a personal finance coach, it’s best to ask them some relevant questions before finalizing; such as

  • Cost of your service?
  • Their credentials?
  • Approach to investing?
  • Assets Allocation?
  • Investment Benchmarks?
  • How much of a tax hit would I take if I invest with you?

By answering these questions, you will be confident of receiving a tailored and cost-effective service.

Executive Summary

What happens when it’s time to buy a house, have a child, or start your own business?

A career-minded woman can easily get caught up in her daily grind, leaving her with little time for financial planning.

Yet without this vital aspect of her life, she is vulnerable to security loss if her situation changes or unexpectedly arises.

As a woman, making a sound financial plan is important for every aspect of your life.

Financial plans are dynamic, and they change as your life changes. Any major change would require you to reevaluate financial planning for your future.

Financial planning for women may seem a daunting task. But not anymore. You are now more informed on what it entails.

You are also aware of when you need to hire a personal finance coach, how to do so, and where to find the one that suits your financial situation.

Best of luck!

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