Women must make time to handle their finances as though their future depends on it. Because it does.
That's the message financial journalist Jean Chatzky delivered as a featured speaker at the N.C. Governor's Conference for Women, held last week in Charlotte. The financial editor for NBC's "Today" show is the author of seven books, including "Make Money, Not Excuses: Wake Up, Take Charge, and Overcome Your Financial Fears Forever."
Life's distractions, or perhaps a hesitancy to talk about money with people in their lives, may keep women from planning, Chatzky said.
Plus, "most of us don't feel great about our money." Women earn less on the dollar compared to men, and end up with substantially smaller retirement balances.
Here are some of the points she offered to help motivate and empower women to get started - "and enable you to stop worrying, at least a little bit":
Talk to people about your finances. Talk to your spouse or partner, and your kids. Also consider working with a financial professional.
Citing statistics from the Financial Planning Association, Chatzky said people with advisers are more likely to save at least 10 percent of their annual income, feel more confident in their ability to cope with unexpected events, and are better at estimating how much they'll need in retirement.
Interview an adviser before picking one, with questions like: What do you recommend for a person in my situation? How long have you been practicing? What do you like about it? How much will this cost me?
Look for someone, Chatzky said, who has three to five years in practice, holds a professional designation, and has passion for the field. If you're not comfortable with them, "they are just not the right financial planner for you," Chatzky said.
"You need to be as open and honest with your financial planner as you are with your gynecologist."
Have a strategy if your college-age kids return home. According to Twentysomething Inc., 85 percent of recent college graduates are moving back home, Chatzky said. The trend even has a name - "adultolescence."
It can span five years. And it can eat up your retirement savings. "It's their job to get out of the house and make it on their own," Chatzky said.
Parents should ask about their plans, discuss money-making opportunities, emphasize saving, and require kids to contribute to the household - perhaps toward rent, Internet, cable or groceries. "They also have to get the sense that life under your roof isn't too cushy."
If you don't like the idea of charging kids, collect their money anyway to put it into an account to present to them later as a gift.
Get personal papers in order. Whether single or married, women need estate planning to make sure their wishes are met. This includes a will, a health care proxy and financial proxy.
And what about wills offered online or in software programs? "Some of them are fine," Chatzky said. "I would prefer you work with an attorney." Or, if you use an online program, ask an attorney to review your work.
Ask questions about retirement. According to formulas, women will live to 85, men to 78, and generating 70-80 percent of your pre-retirement income is enough.
But "women who run marathons and climb mountains, you need more," Chatzky said. "You have to plan to live to 95 or 100."
Consider these questions: Where will you live? When do you want to retire? Do you envision working in retirement? Will you be in your current home? Or someplace where the mortgage will be paid off?
"Talking about finances in general...requires women like us to ponder questions to which perfect answers do not exist," Chatzky said.
"These questions will lead to answers which will lead to more questions," she said. But you'll start developing goals.
