By Donna Walton, VP, Wealth Strategist, TD Wealth
Women represent a growing share of today's workforce. They are entrepreneurs, innovators and leaders in government and industry. At nearly 50% of the labor force, women are in position to drive our 21st century economy.1
The increasing number of single women in America contributes to women's growing share of wealth. Women now are more likely to be single than they were a generation ago, whether due to being widowed, deciding not to marry, marrying later or divorce. As a result, nine out of 10 women will be solely responsible for their finances at some point during their lives.2
How do you take charge of your finances if you are a woman? One of the keys to success is creating a plan for your financial future. It's not just about money – it's also about looking at your relationships, values, goals and interests, and making sure they are incorporated into your plan. There are several steps to creating an effective plan.
1. Know your finances. This is an important first step, because you need to understand where you are today before creating a road map for tomorrow. Taking a close look at your budget and personal balance sheet can help you determine where you can save and maximize your money.
2. Set your goals. Your goals should reflect your values. What is your vision for the future? What are your concerns? The top concerns for most women are making their money last, paying for health care and maintaining the same standard of living during retirement.
3. Create an investment plan. Once you know where you want to go, the next step is creating an investment plan to help you get there. It is important to choose a trusted advisor to help you with your plan. When developing an investment plan, it is important to consider your current stage and lifestyle, your investment goals and your time horizon. Factors like careful asset allocation and retirement planning can make a big difference over time.
4. Make a plan for your estate. Where do you want your assets to go when you pass away? What do you want your legacy to be? Do you have minor children or a special-needs family member you want to plan for? Do you have a business? All of these things may require special planning, and you should discuss these issues with your attorney. A will, durable power of attorney and health-care power of attorney are the essential documents of your estate plan.
5. Review your plan annually. As you review your plan, include your advisors, attorneys, and accountants. Are your goals the same? Has anything changed in the last year that might cause you to revise your plan? Are you on track? What changes, if any, need to be made?
Without a doubt, women are gaining more and more financial power and independence. At the same time, women's financial lives are becoming more complex. Taking charge of your finances with proper planning to your unique situation will only increase that success.