HOW WOMEN CAN DO THEIR PART IN PREPARING AND PLANNING FOR FINANCIAL SUCCESS, B’EZRAS HASHEM What is the first thing you would tell a client vis-a-vis financial planning?
The priority is to achieve clarity: Know your numbers. Prepare a detailed, categorized calculation of how much money your family needs for the year. Many people will feel overwhelmed by this task. That is why we encourage people to work with a coach who will help them with the calculations and questions. How does that process work?
The realities of every family’s financial life are very nuanced and individual. The numbers must be written down and based on actual bank and credit card records. When it comes to listing expenses, it’s best not to estimate because we all underestimate our expenses by 20%. It is just human nature. Some families are computer-savvy and prefer to use an Excel spreadsheet
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July 14, 2021
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for the calculations, while others are more comfortable with a handwritten projection. Once a family has completed their calculations, they now have a specific target number, and they can draw a map of how to get to their goal. This is a crucial starting point. Every financial decision will need to be within the context of this bigger picture. It is a big job, and getting guidance from someone with experience will make the process much simpler and more streamlined. Do you find that women are generally informed when it comes to their finances?
Not really. Women are often out of the loop regarding their finances, because they are so busy in other areas of life. A deeper underlying reason may be that they have self-limiting beliefs about their abilities in the financial realm.
This results in their avoiding to take responsibility. I find that when women do take responsibility for their financial lives and see that they are capable of moving forward toward achieving their goals, they become inspired and energized, and the other areas of life may even become less overwhelming. What are the biggest mistakes families make in regard to fiscal responsibility?
Most families more or less squeak by each month, until seasonal expenses hit. This is because of a lack of planning for annual expenses. The right way to plan is to separately calculate the expenses that come up just once a year, like yom tov, summer camp or a simcha — and divide the amount by twelve. That amount should be set aside each month, so that when the time comes, you’ll have the financial coverage for the irregular expenses. If you follow the principle