CommentaryJanuary 2020 Commentary

Are You All Alone Financially?

While the world often looks like it was built for couples, at some point almost all of us are dealing with our finances completely alone.  The good news is, we’re getting away from that idea that Ozzie is managing all the money while Harriot is busy in the kitchen making banana bread without a clue about anything except how much her coupons save the family each week.  Today, successful women can support themselves and handle money as well as a couple.  In fact, according to the US Department of Labor:

  • While almost 50% of marriages end in divorce, and the average age of widowhood is 59 years old, women now out earn their spouses 38% of the time.
  • While women still earn less than men, almost 47% of the US workforce is female.
  • Women own close to 10 million businesses.
  • Mothers are the primary or sole earners for 40% of households with children under 18 today, compared with 11 percent in 1960, and 70% of mothers with children under 18 participate in the labor force, with over 75% employed full-time.
  • More than 40 percent of women in the labor force had college degrees in 2016, compared with 11 percent in 1970.

Alone does not mean financially destitute for women anymore.  In fact, we can tell not only from statistics but also from our personal experience, that single women are making bigger and more impactful financial decisions than ever before.  How do they do it?  In our experience, there are 5 main factors that help single women make great financial decisions.

  1. They build a professional team. Fearful individuals ask their brother in law for advice.  Successful women tend to know they can’t be experts in everything, and want a tax advisor, a lawyer and a financial advisor to all help the understand the complexity of their situation and work together to maximize it.
  2. They are comfortable not being an expert, but they work to understand the basics. Oh Lordy, save us from single person who doesn’t want to know what is happening with their money.  Learning about money is a lifelong process, and those that care enough to care tend to do better, in our opinion.  Successful women read, discuss money with their team and their peers and advocate for themselves.
  3. They ask questions- including tough questions. Fearful individuals tend to be afraid to speak up and important information gets missed because of it- not just for them, but also for their team.  Successful women ask the tough questions.  “What happens if I lose my job and my accounts are down in value?”  Key information may be that the woman is worried about losing her job, but also how her situation is impacted by a down market.
  4. They think about downside risk differently and prepare for it. Scared individuals say, “I don’t want my account to go down, even if I don’t make any money.”  Savvy individuals say, “I want to make more to deal with inflation risk, but I understand to do so may trigger volatility.  How should we handle that volatility?”  See the difference?
  5. They make decisions and don’t second guess themselves. Fearful women tend to delay decisions indefinitely.  Successful women tend to get a good sense of the facts, risks and rewards, give themselves a deadline, and make a decision, in our experience.  Further, they don’t go back on their decisions until new information or a life change happens.

We have also seen that these five skills and habits are ones that are built over time and fine-tuned.  They don’t happen overnight for most people.  Interestingly, as the skills get stronger, so does the self-confidence.  It’s hard work to build this discipline, but it also seems like a worthy lifetime exercise to us.
The Planned Approach, Inc.

420 W. 98th Street
Kansas City, MO 64114
(816) 941-0098

Our Disclosures/CRS FORM
The Planned Approach, Inc.

420 W. 98th Street
Kansas City, MO 64114
(816) 941-0098

Our Important Disclosures

Insights for Your Life Stage

The Planned Approach, Inc. is an Investment Advisor registered with the Securities and Exchange Commission. No client or prospective client should assume that any information presented or made available on or through this website, is a receipt of, or a substitute for personalized financial planning consulting advice. Financial planning consulting advice can only be rendered after the following conditions are met: 1. Delivery of our Form CRS, Form ADV Part 2A and 2B to you; 2. Execution of an Investment Advisory and/or Financial Planning Engagement Letter between us. You may obtain a copy of our ADV Part 2A Disclosure Brochure containing similar information by sending a written request to The Planned Approach, Inc., 420 W. 98th Street, Kansas City, MO 64114. Additionally, please note that hyperlinks included throughout this site are provided as a matter of convenience and we disclaim any and all responsibility for information, services or products found on websites linked hereto. Please contact the firm for further information. The Planned Approach, Inc. is not engaged in the practice of law and does not provide legal advice. Always consult with an attorney regarding your specific legal situation. The Planned Approach, Inc. is not engaged in the practice of tax consulting. Always consult with your tax advisor regarding your specific tax situation.