95% of women will be their family’s primary financial decision maker during their lifetime1 and yet, women often feel unprepared to manage their finances. Having a written financial plan can dramatically improve your chances of achieving your goals.
For women, the financial landscape has been changing for decades. Women control more than $39 trillion, or about 30% of the world’s wealth, and by 2020, that number is projected to increase to $72 trillion2. In addition to this wealth, nearly two-thirds (or 63%) of American women are breadwinners or co-breadwinners3. Yet despite this progression, just 20% of female breadwinners say they are “very well prepared” to make wise financial decisions, compared to 45% of their male peers4.
One of the best ways you can feel prepared and empowered to make wise financial decisions is to create a written financial plan. A financial plan brings together your life story, your ambitions, your dreams, and your assets into one comprehensive plan. It serves as the foundation for your life and your financial journey, encompassing all wealth management components – investments, tax planning, trusts and estate planning – that can protect you today, and also help you achieve Economic FreedomTM. Having a written financial plan works to limit detrimental behavior and avoid emotion-based financial decisions.
It’s never too late to start thinking about your financial goals. Here are six ways to get started and power-up your financial plan.
Write down your goals and your vision for your financial future and be specific. What does success look like for you? When do you want to retire? What is the best possible outcome for your finances? Try to be as specific as possible when making note of your goals. For example, instead of just writing down “retirement” as one of your goals, try to visualize what that looks like. How old are you when you retire? Do you see yourself living in the same place? Are you traveling to all those places on your bucket list? These answers will serve as a good starting point to formulating your financial plan.
Share your financial goals with your family, your kids, your friends. Why is sharing important? It can help keep you accountable to achieve those goals you have set for yourself, and in some ways, can make those goals feel more real and tangible. For commonly shared goals (like saving up for a house with your spouse), these conversations can help to ensure that you’re both on the same page about the timing and how much you both need to save. Sharing financial goals with your kids (especially your daughters) can help them learn the importance of financial education, and give you a chance to model behavior that demonstrates good money values.
Break down the timeline. Let’s face it – most of us are procrastinators with at least one thing in our lives. A study showed that 40% of Americans say that financial planning is “not their favorite thing to do, but they know it needs to get done, like a medical check-up5.” Breaking down your financial goals and action steps into one-year and five-year increments can help you formulate specific steps to achieve your goals. For example, if you have kids, you already know that you have an 18-year time horizon before you’ll need money for their college education. Setting up those annual checks can help you make sure you stay on track.
Create milestones to measure success along the way. With the example of saving for your kids’ education, perhaps you can use those big grade markers (the transition to middle school for example) to measure your progress and track your success. With retirement planning, you could use milestone birthdays or a job change to check in on your progress.
Add some fun to celebrate your wins. The road to achieving your financial goals shouldn’t be a drudge. Incorporate elements that are important to you, whether it’s traveling, taking up new hobbies, or other activities that add meaning to your life.
Revisit your plan when life changes. Part of the power of the plan is the ability to have something to turn to when life happens. Whether it’s marriage, the birth of a child, or career change, reviewing your plans and making the appropriate adjustments along the way will help ensure you stay on track to achieving your financial goals.
Having a written plan is critical to helping you achieve your financial goals. Why? A study has shown that you become 42% more likely to achieve your goals simply by writing them down on a regular basis6. A written financial plan serves as your center, always keeping you focused on and accountable to the goals you want to achieve.
It’s good to keep in mind that your financial plan is a living, breathing document. So, as your goals change and as you face both expected and unexpected life events, your financial plan can change with you. We encourage you to speak with your advisor about how we can help your financial plan come to life.
Want to learn more about the value of having a financial plan? Listen to Laura explain how having a financial plan can change your life in The Power of the Plan podcast, episode 33.
1 Family Wealth Advisors Council,“Women of Wealth,” 2011.
2 Leonhardt, Megan, “Women’s Wealth Growing Faster Than Men’s,” 6/7/16.
3 The Shriver Special Report, “The New Breadwinners,” 2009.
4 She-conomy.com, “Women and Spending.”
6 Morrissey, Mary. “The Power of Writing Down Your Goals and Dreams,” 9/14/16.
Mercer Advisors Inc. is the parent company of Mercer Global Advisors Inc. and is not involved with investment services. Mercer Global Advisors Inc. (“Mercer Advisors”) is registered as an investment advisor with the SEC. The firm only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements.All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change. Some of the research and ratings shown in this presentation come from third parties that are not affiliated with Mercer Advisors. The information is believed to be accurate, but is not guaranteed or warranted by Mercer Advisors. Content, research, tools, and stock or option symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or to engage in any particular investment strategy. For financial planning advice specific to your circumstances, talk to a qualified professional at Mercer Advisors.
Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that the future performance of any specific investment, investment strategy or product made reference to directly or indirectly, will be profitable or equal to past performance levels. All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals may materially alter the performance and results of your portfolio. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client’s investment portfolio. Historical performance results for investment indexes and/or categories, generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment-management fee, the incurrence of which would have the effect of decreasing historical performance results. Economic factors, market conditions, and investment strategies will affect the performance of any portfolio and there are no assurances that it will match or outperform any particular benchmark.
This document may contain forward-looking statements including statements regarding our intent, belief or current expectations with respect to market conditions. Readers are cautioned not to place undue reliance on these forward-looking statements. While due care has been used in the preparation of forecast information, actual results may vary in a materially positive or negative manner. Forecasts and hypothetical examples are subject to uncertainty and contingencies outside Mercer Advisors’ control.
Jun 8, 2018
Jun 8, 2018
Jun 28, 2018
Aug 24, 2018
Aug 24, 2018
You are leaving the Mercer Global Advisors website and will be redirected to the Science of Economic Freedom (SOEF) website. SOEF is brought to you by Mercer Advisors Inc., the parent company of Mercer Global Advisors Inc., and is not involved with investment services. Mercer Global Advisors Inc. is an SEC-registered investment adviser headquartered in Denver, CO.
The Science of Economic Freedom website should not be construed by any consumer and/or prospective client as Mercer Advisors’ solicitation to effect, or attempt to effect, transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. Furthermore, information on the SOEF website should not be construed, in any manner whatsoever, as the receipt of, or a substitute for, personalized individual advice from Mercer Advisors.