Women & Their Financial Future

5 Steps Women Should Consider Making to Take Control of their Financial Future

When it comes to women and money, there is some good news, says Lance Drucker, ChFC, CLU, a veteran financial professional.

On average, women are more independent and financially literate than ever before, he says. On the other hand, Prudential’s eighth biennial study titled Financial Experience & Behavior Among Women recently revealed that women are no more likely to make sound financial decisions today than two years ago – or even when the study began 10 years ago.

“When women are more involved with their own finances, they feel more in control of their independence and are generally happier, but many seem to suffer a disconnect between what they want in their financial future and their spending habits,” says Drucker, CEO and president of the New York City-based Drucker Wealth Management, (www.DruckerWealth.com), a firm that specializes in empowering women to make sound financial decisions.

“While most American women say having enough money to maintain their lifestyle throughout retirement was very important, only 14 percent of those polled said they were very confident that they’d achieve that goal.”

Drucker, author of “How to Avoid Bag Lady Syndrome (BLS): A Strong Woman’s Guide to Financial Peace of Mind,” offers some guidance on the steps women can take to help them not only feel empowered about their money, but actually take control of their financial future:

•  Figuring out the cause of your Pain: Too many women really don’t want to look too deep as to why finances cause them so much stress – kind of like not getting on a scale because we really don’t want to see how much we weigh.  Before we can come up with a solution to your financial problem, we need to figure out what the problem actually is: lack of income, growth, financial illiteracy…

•  Budgeting vs. Louis Vuitton handbags.  We all need to do or buy things that make us feel good, but we need to factor our indulgences into our overall life plan. Establishing a necessary budget (what we need just to get up in the morning) as well as an Aspirational budget (more of a wish list) will help guide your decision-making process as to what you can or can’t afford to do (including buying that “to die for” item).

•  “I don’t know what I have;” Why a Balance Sheet is essential: Too many times our women clients have no idea what they have as far as financial resources, how their assets have performed, and how much they are paying for someone’s help.  Creating a balance sheet, collecting all of your statements, and taking an accounting of your life gives you the data to start making smart decisions.  

•  Developing a Plan vs. the Wine and Dark Chocolate approach: Hoping things will just get better, or the chocolate-and-wine approach to life, does have its benefits (as my wife has explained to me on numerous occasions).  Developing a written plan that lays out what you want financially and when you want it goes a long way toward peace of mind.  The wine wouldn’t hurt while writing the plan though.

•  The Gym Commandoes: There are two types of people who succeed at the gym: those do-it-your self folks who walk around with a little notebook like Rainman tracking their progress, or those who hire a coach/trainer.  Both work.  People who show up at the gym with a vague sense of “I’m gonna ride the bike, hit some weights, then take a really long steam,” typically don’t last.  By now, you have done the work. You’ve figured out your pain, budget, balance sheet, and a plan … Now you have to implement the strategy, and this is where the fun begins!

About Lance Drucker ChFC, CLU

Lance Drucker is CEO and president of NYC-based Drucker Wealth Management, a wealth management firm specializing in financial issues that affect women. He’s the author of “How to Avoid Bag Lady Syndrome (BLS): A Strong Woman’s Guide to Financial Peace of Mind” and offers resources at www.DruckerWealth.com to empower women to make smart financial decisions. He graduated from SUNY Binghamton with degrees in Accounting & Finance, and soon after joined the firm Drucker Wealth Management, founded by his father in 1959. He earned his Chartered Financial Consultant (ChFC®) & his Chartered Life Underwriter (CLU®) degree in 1993, and in 2012, he received a Certificate in Retirement Income Planning from the Wharton School of Business. He is a multiyear winner of the 5 Star Wealth Manager Award, as well as a recipient of the Women’s Choice Award for Financial Advisors.  As a proud sponsor of the Wounded Warrior Project, Drucker organizes the Polar Bear Plunge fundraiser for the WWP every January and has participated in the Tough Mudder challenge, and Spartan Race, which has helped to fund more than $2 million for wounded warriors.

All proceeds from the sale of his book
will go toward the Wounded Warrior Project
.

The quest for financial independence

7 Steps for Addressing ‘Bag Lady Syndrome’ –
a Fear of Losing Financial Independence

Study Finds Even Wealthy Women Worry About
Becoming ‘The Best Dressed Bag Lady in Their Community’

Nearly half of all American women, no matter their background, share a fear that may seem odd given the wealth of some: They are afraid of losing their financial independence, otherwise known as “Bag Lady Syndrome,” according to a 2013 study.

Of those who harbor BLS anxiety, 60 percent were the primary breadwinners for their households, according to the Allianz poll of 2,200 women ages 25 to 75.

“Financially, women’s needs are different from those of men, and the financial industry isn’t meeting them,” says Lance Drucker, CEO and president of the New York City-based Drucker Wealth Management, (www.DruckerWealth.com).

“Women typically live longer than men, so they need more retirement savings.  Further compounding the problem is the fact that, in many cases, women are paid less for the same job as men. Finally, many have fewer earning years because they dropped out of the labor force for a time to have and raise their children.”

Drucker, author of “How to Avoid Bag Lady Syndrome (BLS): A Strong Woman’s Guide to Financial Peace of Mind,” offers seven action steps that women can do to address their financial insecurity:

•  Identify your pain as well as your goals. Answer the following questions: What keeps me up at night?  What worries me most about my money & my future? What do I want to do with the rest of my life? When can I afford to retire? Can I afford to stay retired? Can I travel, change careers, or go back to school?

•  Create a budget that includes fixed and variable monthly costs as well as one-time expenses. Based on your budget, start building a cash cushion that will cover six to nine months of fixed expenses. The ultimate goal of retirement planning is to create an income stream that is sustainable and will support your retirement needs.

•  Create a balance sheet of savings and investments. This includes your savings account, stocks, bonds, mutual funds, investment real estate, cash value life insurance, annuities, retirement accounts, individual retirement accounts, 401 (k) plans and other assets.  Then further break it down by pre-tax and post tax-accounts.

•  Review insurance coverage and needs. Are you supporting anyone else? Is there a need for Life Insurance?  Who will take care of you if you get sick?  Do you have Long Term Care Insurance? One mother can raise 10 kids, but 10 kids can’t take care of one mother… Younger and healthier women may be tempted to overlook the importance of this step, but failure to anticipate potential health issues can be very expensive.

•  Address your estate-planning needs. Do you have a will, a durable power of attorney or a health care proxy?  Have you updated your beneficiary designations on your retirement accounts?  Does it make sense to put your assets in a trust to avoid probate? Answers for these questions are important. 

•  Develop your investment strategy. Is there a purpose to your current investment approach, or are you just accumulating funds? We recommend something we call a “4 Bucket Approach to Purposeful Investing” that has been designed with the help of a Wharton Business School professor.

•  Hire a Coach. Studies have shown that those investors that utilize a high quality financial advisor feel more confident, optimistic, and significantly more likely to stick to their plan versus do-it-yourself investors. 

About Lance Drucker ChFC, CLU

Lance Drucker is CEO and president of NYC-based Drucker Wealth Management, a wealth management firm specializing in financial issues that affect women. He’s the author of “How to Avoid Bag Lady Syndrome (BLS): A Strong Woman’s Guide to Financial Peace of Mind” and offers resources at www.DruckerWealth.com to empower women to make smart financial decisions. He graduated from SUNY Binghamton with degrees in Accounting & Finance, and soon after joined the firm Drucker Wealth Management, founded by his father in 1959. He earned his Chartered Financial Consultant (ChFC®) designation in 1990 and his Chartered Life Underwriter (CLU®) degree in 1993, and in 2012, he received a Certificate in Retirement Income Planning from the Wharton School of Business. He is a multiyear winner of the 5 Star Wealth Manager Award, as well as a recipient of the Women’s Choice Award for Financial Advisors.  As a proud sponsor of the Wounded Warrior Project, Drucker organizes the Polar Bear Plunge fundraiser for the WWP every January & has participated in the Tough Mudder challenge, and Spartan Race, which has helped to fund more than $2 million dollars for wounded warriors.