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Financial Planning for Women in Their 20s, 30s, 40s, and 50s

As women are leaning into their careers, asking for raises, starting businesses, and making more money, their financial goals are constantly evolving. Financial planning for women in their 20s looks drastically different than for women in their 50s. On this episode, we’re joined by Lauren Rebbel, CFP®, CDFA®, Partner at The Prosperity Consulting Group, to discuss financial planning steps every woman should make in various stages of her life.

In this episode, you will learn:

  • How women’s financial planning goals differ from men’s
  • Financial planning strategies women should make in their 20s, 30s, 40s, and 50s
  • How women’s financial goals change throughout their life
  • Tips for women to prioritize their finances

Transcript

Maggie

Thank you so much for joining us today, Lauren.

Megan

Thanks so much, Lauren.

Lauren

Thank you for having me.

Maggie

So you work with a lot of women in various stages of their lives. Have you found that woman’s financial goals differentiate from a man’s?

Lauren

In many ways, it’s not the goal so much that differs. Men and women have similar financial objectives. They both want to save for a comfortable retirement, live comfortably, and feel financially secure. It is, however, the vision behind these goals that can differ between men and women.

Men are often more focused on the bottom line performance; he may want to have X number of dollars in his retirement account to have met his financial goal. Women often have a much more purposeful outlook on the same financial goal. Behind the dollar signs on her investment statements are often unspoken goals, dreams, and fears.

For example, when I’m sitting across from a female client and asked her what saving for retirement means, she’ll tell me something like, Lauren, when I’m retired, I want to have enough money so I can always care for myself and never need to live with my children. I want to be financially okay if my spouse happens to die before I do. I don’t want to have to worry or stress about running out of money.

Now, most women do not lay awake at night and think I need to update my financial plan to see if I can retire early. They lay awake thinking, I really hope I can retire after putting my children through college. So you see, the goal is the same, which is saving for retirement. But how that goal is visualized between men and women is drastically different.

Megan

So Lauren, do you have any suggestions as to how couples can discuss their financial goals together?

Lauren

That’s a fantastic question. My suggestion is to have an open conversation with your partner, or simply yourself if you’re single, about what exactly it is that you’re saving for. We carve out time for dinner with friends, for date night, for exercise: give your money the same attention. Make a list of your financial goals, and then break them down as far as you can. What does each goal truly look like and mean for you? This will help you and your partner understand what is truly financially important to each other. And ladies, this will also help you re-engage in your family’s finances if you’ve been sitting on the sideline, letting your spouse manage the money over the past few years.

Maggie

That’s really interesting. Speaking of having an open conversation about your family’s finances, do you find that woman’s financial goals change throughout their life? And how?

Lauren

Of course. As women are leaning into their careers or asking for raises, many women are starting their own businesses and making more money.

Our financial goals are constantly changing and evolving. Women are reaching new levels of financial success and financial freedom. Now, as you know, that doesn’t typically happen overnight.

For instance, most 20-year-olds are not thinking about retirement. They’re just starting out in their jobs. Their financial goals could be to pay off student loans to buy a home. They’re beginning to donate to charities and causes that align with them personally. They may start to save for their company in their company’s retirement plan, but paying off credit cards and just starting to build that solid foundation is where many 20-year-olds are.

And this looks drastically different from a woman who is in her 60s. A woman in her 60s may be approaching retirement; she may be thinking about funding education plans for her grandchildren while traveling the world and participating in charitable giving circles. The point is, this is okay. Your financial goals must change as you do throughout your life. It’s important for you to realize this and constantly reevaluate your own financial goals. And it’s critically important that your goals are aligned with your investment strategy and overall wealth management plan, not only for where you are right now but for where you are going.

Megan

You gave a little example about what 20-year-olds will be considering right now. But what should women in their 30s be focusing on when it comes to finances?

Lauren

Okay, so 30 is a tougher decade. I feel like as women in our 30s, we are pulled in so many different directions. In this time period, many women are getting married or having children; they’re trying to fill the wife, mother, and income earner role. Many women in their 30s are trying to be all things to everyone, and it’s very exhausting. So they enter survival mode. And in survival mode, we remove anything from our plates that doesn’t appear to be necessary and try to autopilot the rest. Unfortunately, focusing on our money and financial goals isn’t typically a top priority as we’re just trying to keep our heads above water.

Maggie

Do you have any tips for women in their 30s to help them prioritize their finances?

Lauren

I do. That’s a great question. Let me share a few tips with you for women in their 30s. First, make sure you’re focusing on your work retirement plan. The more you can save, the better, but at a minimum, make sure you’re saving up to your company’s match. If you’re in a lower tax bracket, and after speaking with your accountant, consider allocating a portion of your savings to the Roth option within your work retirement plan. You want to review your investments and make sure that they’re the best fit for you.

Secondly, pay off credit card debt. Start with those that have the highest interest rates and work your way down. Next, begin to build an emergency fund to eventually have enough money in the emergency fund to cover 6 to 12 months of expenses.

Ladies, if you have small children, determine the need for life insurance. And again, be involved in your family finances–don’t completely turn the shop over to your partners.

And last but not least, in your job, negotiate your salary and ask for a raise. So often, women in their 30s are simply happy to have a job that offers some flexibility. We take this as a gift, and we don’t want to rock the boat or sound greedy and by asking for more money. I want you to ask for more money. Be bold and courageous. Don’t leave money on the table.

Megan

Wow, Lauren, that’s wonderful advice. You know, as Maggie and I are both women in our 30s ourselves. I know a lot of these items are at the forefront of our minds right now.

Lauren

That is so true. Recently, a good friend of mine was offered a very big position with a new company. She’s in her upper 30s. It was her dream job, and never in a million years did she think she would get it. When she received her offer letter, the salary was more than she could have ever imagined. And she was elated. She was completely thrilled. Yet, she went back to her employer and negotiated it for more money. When I asked her why she took the risk of negotiating, my friend looked me straight in the eyes and said, because that is what a man would have done.

Maggie

Yeah, that is absolutely wonderful to hear. And I’ve also heard that men are much more likely to negotiate their income. And it’s great that more women are asking for what they’re worth. As women progress in their careers, marriages, etc., what should women in their 40s be focusing on when it comes to their finances?

Lauren

In your 40s, you want to continue to build off of everything we talked about in your 30s and continue to fine-tune that roadmap and financial plan. You want to continue to save for retirement and try to max out those employer-sponsored plans. Next, live within your means. Try not to get into debt. It’s okay if you don’t have what your friends on Facebook and Instagram do.

A few months ago, I was scrolling through my personal Facebook feed, and one of my friends posted that she bought a beach house. While the picture of the home was stunning, I was struck more by the first comment that a woman made right underneath this beautiful picture. And it said, Oh my goodness, what am I doing wrong?

And to the woman and to this comment, I wanted to say you weren’t doing anything wrong. You never know what is behind someone’s financial situation. Do not measure your success or happiness based upon someone’s financial purchases. Stay in your lane, run your own race. And you do you within staying in your own lane. Create a family budget and stick to it. This is a powerful tool and will allow you to take a proactive approach to your finances instead of a reactive one. Now, don’t be turned off by the word budget. I feel like every time I say the word budget, it’s equivalent to a no carbs or no sweets and the strictest of diets.

Budget has, again, restrictive and unappealing connotations. I encourage you to think about it in quite the opposite way. Build in your travel and your fun money, account for your savings and everyday expenses. Allow your budget to be crafted according to your goals and the life you want to live, both short and long-term. Finally, if you haven’t done so already, get your estate planning documents in order. Those are your will, power of attorneys, and healthcare directives. Make sure your beneficiaries on your accounts and life insurance policies are exactly who you want them to be.

So that’s just a few quick tips for women in their 40s.

Megan

Well, I couldn’t agree more about staying in your own lane. You know, comparing yourself to others creates a lot of unhappiness, and being grateful for what you have and doing your best is key. So Lauren, what about women in their 50s? What should they be focusing on when it comes to finances?

Lauren

As we continue to age, again, we’re going to build off of what we’re doing in our 30s and what we’re doing in our 40s. But a few additional tips, in addition to the ones I’ve already mentioned, are one: account for how you’re spending. Often as we age, we become very charitable. Make sure you know where your money is going. And have a heart to heart with yourself on whether or not you’re being overly generous with charities you’re giving to or possibly your family members, your children, and grandchildren.

So again, reflect on your budget and if you need to rein in your generosity. Next, take advantage of the retirement plan catch-up contributions in your employer-sponsored plan now that you’re age 50 and over. This is so powerful and a great way for you to increase your savings.

Also, your children are likely entering college or on the verge, and it’s important that you manage those college expenses. Do not let your children’s college education put your financial future and upcoming retirement in jeopardy. Be mindful of the price tag you’re paying for college and consider applying for aid grants and scholarships.

And you just want to continue to revisit your evolving financial goals. Meet with your financial planner and advisor to make sure that you are on track to meet those goals. Make sure your investments are working congruently with your financial plan and that all areas that are critically important to your financial success are being discussed and addressed. And finally, if it feels like you’re off course from where you want to be, don’t give up. Put your nose to the grindstone and do the work, stick to a budget, pay off debt, reduce unnecessary expenses and begin saving more. No matter what age you are, small steps can add up to big changes over time. You just need to keep going.

Maggie

Wow, that’s great advice. And it sounds like financial planning evolves and changes a lot as we progress through various stages of our lives. Before we let you go, we do have one final question for you. It’s a bit of a philosophical one. And it is what does living a prosperous life mean to you?

Lauren

A prosperous life to me means health, time, and happiness.

Maggie

That is a great answer. And those are definitely three things that I think everybody needs.

Megan

Absolutely. Thank you so much for joining us on The Prosperous Life, and it was great having you! We just want to let everyone know that Lauren’s contact information will be in the show notes.

Maggie

Thank you so much, Lauren.

Lauren

Thank you both!


Contact Lauren Rebbel:
www.prosperityconsult.com/lauren-m-rebbel
LMR@prosperityconsult.com
410.363.7211

Contact The Hoffman Group:
www.hoffmancpas.com
info@hoffmancpas.com
443.320.4101

Contact The Prosperity Consulting Group:
www.prosperityconsult.com
info@prosperityconsult.com
410.363.7211

This information is intended for educational purposes only. It is not intended to provide any investment advice or provide the basis for any investment decisions. You should consult your financial adviser prior to making any decision based on any specific information contained herein. It is not intended to provide, and should not be relied on for, any tax or legal advice. You should consult your tax or legal adviser prior to making any decision based on any specific information contained herein. The Prosperity Consulting Group is not affiliated with The Hoffman Group.