What are some of the most common financial mistakes women make, and how can I avoid them?

Mistake #1:  Relying on Someone Else To Manage Your Finances

Life can get crazy, and sometimes without realizing it, you have handed over the purse strings.  By not engaging in the family finances, women set themselves up for potential hardships.  When one spouse controls the finances, the other spouse can be left in a vulnerable position (especially if the marriage ends).  This can also lead to losing your financial identity.  Merged accounts and shared credit cards in your significant others name may lead to lack of an active credit history.

Solution:  Attend meetings together.  Joint investments or property should be held in both names.  Make a list of all bank and brokerage accounts and insurance policies and keep it with other important documents, such as wills.  Maintain some individual accounts.  Yours, mine, and ours will allow for each to maintain credit identity.

Mistake #2: Not Saving and Investing Enough

Outliving your retirement income is one of the biggest risks any retiree faces, especially women.  According to the National Center of Health Statistics, a woman who reaches age 65 can expect to live until at least age 85. However, because women typically spend less time in the workforce (and may earn less for the same work than their male counterparts), women’s retirement savings and benefits are often shortchanged.

Solution:  Be diligent with your contributions.  Resist the urge to cut back on retirement saving to meet other expenses or accommodate other goals.

• Increase contributions to your Simplified Employee Pension (SEP), SIMPLE or company 401(k) plan.
• Annually review and adjust your saving and investing goals and managing your asset allocation to stay aligned with your long-term goals, even during periods of market uncertainty.
• Consider consolidating your retirement plan accounts from previous employers, making it easier to track and manage your investments

Mistake #3: Underestimating Your Need for Insurance

On average, women outlive men by 7 years (mortality for women is 79 years vs. 72 for men).  Many women are faced with caring for their husbands later in life, but after his death they may be left with no one to care for them. Because of this, women’s health care needs will likely be substantially higher than men, making it much more expensive for us to live longer.   What does this mean?  It means we may not only need to consider products like Long-Term Care Insurance, but we also need to have much more money in the retirement pot than men in order to not outlive our funds.

Solution:  Research your options regarding insurance.  Long-Term Care Insurance helps cover the cost of care you may need.  It gives you the flexibility to participate in making choices that impact your care, about the services you receive, where you receive them and who provides the care.  Life insurance can’t protect your family from losing you, but may help your family financially should you die early. This applies whether you are the primary wage earner or not. 

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Jean B. Muldowney, Financial Advisor, Wells Fargo Advisors, LLC, Member SIPC

As a Financial Advisor, I am dedicated to developing financial and investment strategies that are in line with your needs and goals. Making sure your wealth continues to work in support of the goals you have established takes careful planning. Such preparation is not a single event – it is a process. Backed by the vast resources of Wells Fargo Advisors, I focus on delivering personal service that surpasses client expectations. I hold all the requisite securities registrations and insurance licenses as well as a Bachelor of Arts degree in Communications from John Carroll University, Cleveland, Ohio. I take pride in working for a firm that puts you first.