I was part of the personal finance panel at the Texas Conference for Women last week, and more than 700 attended our panel. For the first time, I had a speaker on my panel that was not a personal finance expert, Tina Pennington, co-author with her sister, Mandy Williams, of “What I Learned About Life When My Husband Got Fired”. Their book is a firsthand account of Tina’s financial situation when her husband was fired and how her sister helped her get into tip-top financial shape. The other speakers included April Benson PhD, an esteemed money therapist and author of “To Buy OR Not To Buy,” and Charlotte Stallings, a dynamic personal finance speaker in Houston, who is coming out with her new book in December. Here were my take aways for Rebounding and Recovering strategies.
The consensus seemed to be that many women are overwhelmed with choices in their 401ks. I offered the following advice. Start by consolidating old retirement plans to their current retirement plan. This includes old pensions you are able to rollover. The second part is to truly limit the number of mutual funds you have in your 401k. Pick one of each of the following categories: large cap, small cap, international and bond. The percentage you put in each depends on your age and risk level. A general rule of thumb is your age in bonds. If you are 35, you should have 35% of your total portfolio in bonds.
Another key piece of advice was using a financial calculator to determine how much you should be saving annually for retirement. My favorite ones are on kiplinger.com/tools. Even though most of us aren’t saving what we should be, you will most likely feel relieved to know your number.
April Benson kept astounding the room with statistics and profound observations about our shopping habits and money philosophies! About 25% of people shop for revenge, either against their spouse or parent. She also described shopping as a way of holding onto LIFE and putting off death as long as we can. She then went into her six questions you should ask yourself when you are shopping, such as “What if I wait?” and “Where will I put it?” They will clearly make you spend more consciously, spend less and feel more in control of your money. I’m reading her book now and enjoying it tremendously; pick up a copy now.
Don’t Use Financial Terms
Tina Pennington kept saying she wasn’t an expert, but she clearly knew much more than most individuals in the room. One point she brought up, which struck a cord with me, was when she was attempting to roll up her sleeves and learn about her financial situation, her sister, Mandy, asked if she knew what her assets and liabilities were. Tina stood there with a blank stare. Mandy then went on to explain they were simply what she owns and what she owes, which Tina easily could figure out. We get stuck very often on financial terms, and they can be a huge obstacle to us moving forward. Take a step back and simplify it so you can actually move forward.
Needs Versus Wants
Charlotte Stallings, our eloquent moderator, discussed her “Needs Versus Wants” cards. Attach them to a credit card so you can quickly make a decision before purchasing an item you may not need. Next time you buy something, think long and hard, do you need it or just want it?
We’d love to hear your tips on how else to rebound and recover!
2010 speaker Galia Gichon is an independent personal financial expert with more than 15 years in financial services, including nearly 10 years on Wall Street and an MBA in finance. She founded Down to Earth Finance, which offers individual sessions and seminars without selling any investments. She is the author of, “My Money Matters,” a boxed set with money affirmations, instant money tips and workbooks. Gichon has been widely quoted as an expert on money and women. Before starting her own company, Gichon was a securities research analyst at Bear Stearns and Nomura Securities, and also worked for Institutional Investor. www.downtoearthfinance.com