Women and Poverty.
Women are 80% more likely to end up in poverty when compared to men according to a recent article in the Austin American Statesman. A difference in pay is a major reason for this heartbreaking statistic. Women earn about 76 cents on the dollar when compared to the compensation for men. This difference in pay over a forty-year career amounts to over $430,000. Other factors tilting the scales against women are divorce and longevity. Women are more likely to stay at home and raise children as well as be the caregivers for parents taking them away from the workforce or severely reducing their working hours.
Whether married, divorced, single, or widowed here are a few strategies to help strengthen your financial situation.
Create a budget. A budget will give you a picture of where your money has been and where it’s going. Mint.com is a tremendous resource helping individuals get their financial life organized. Carrying a notebook allowing you to record cash purchases is also a wise idea. Once cash leaves an ATM most people don’t keep a list of how the money is spent. It’s easy to get nickeled and dimed with cash transactions. After a few months of tracking your expenses you should be able to identify an item or two to reduce or eliminate. Lower expenses equate to more savings.
Create a financial plan. A financial plan will help quantify your hopes, dreams and fears. The financial plan will expand your budget to include investments and liabilities. An annual review of your plan will keep your financial life on the right track. The best time to review your financial plan is near your birthday an easy day for most people to remember.
Automate your expenses. Automating your expenses will help your budgeting process and simplify your daily cash management activities. It may also improve your credit score as bills will always be paid on time. Automatic payments will also eliminate useless and expensive late fees.
Automate your investments. Setting up a monthly investment program into a savings account, mutual fund or retirement account will allow you to create wealth automatically. The act of monthly investing is more important than the dollar amount. The money you save from your budget can now be deposited into your investment accounts.
Establish an individual retirement account or IRA. The key to this account is the “I” which stands for individual. An IRA will be yours and yours only. If you’re under the age fifty you can deposit $5,500 per year or 100% of your income if it’s less than the allowed amount. If you’re over fifty, you can add an extra $1,000 to your contribution.
Invest in an annuity. The money in an annuity grows tax deferred and will give you a guaranteed income stream for life. An annuity will help offset longevity risk paying you a monthly income for as long as you live.
Get help. Working with a financial advisor, CPA, attorney or banker can help you set up accounts, establish a budget or create an investment plan. A team of trusted advisors can help bring you financial tranquility.
Last, my Grandma Bee was born in 1900 and lived into her nineties. She always carried a small spiral bound notebook with a few colored pens in her purse. When I was young I would go shopping with her and after a purchase she would take out her notebook and jot down a few notes. I never knew what she was recording but I’d like to think she was keeping track of her expenses. If it worked for my grandma, it may work for you too!
No one will be able to stand against you all the days of your life. As I was with Moses, so I will be with you; I will never leave you nor forsake you. ~ Joshua 1:5
Bill Parrott is the President and CEO of Parrott Wealth Management, LLC. www.parrottwealth.com.
July 12, 2016
 Older Women More Likely Than Men to Face Poverty by Adam Allington, Associated Press, Austin American Statesman, July 11, 2016.